Correlation Between Farglory FTZ and Tainet Communication
Can any of the company-specific risk be diversified away by investing in both Farglory FTZ and Tainet Communication at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Farglory FTZ and Tainet Communication into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Farglory FTZ Investment and Tainet Communication System, you can compare the effects of market volatilities on Farglory FTZ and Tainet Communication and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Farglory FTZ with a short position of Tainet Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farglory FTZ and Tainet Communication.
Diversification Opportunities for Farglory FTZ and Tainet Communication
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Farglory and Tainet is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Farglory FTZ Investment and Tainet Communication System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tainet Communication and Farglory FTZ is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Farglory FTZ Investment are associated (or correlated) with Tainet Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tainet Communication has no effect on the direction of Farglory FTZ i.e., Farglory FTZ and Tainet Communication go up and down completely randomly.
Pair Corralation between Farglory FTZ and Tainet Communication
Assuming the 90 days trading horizon Farglory FTZ Investment is expected to under-perform the Tainet Communication. But the stock apears to be less risky and, when comparing its historical volatility, Farglory FTZ Investment is 1.38 times less risky than Tainet Communication. The stock trades about -0.01 of its potential returns per unit of risk. The Tainet Communication System is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5,140 in Tainet Communication System on August 29, 2024 and sell it today you would earn a total of 2,900 from holding Tainet Communication System or generate 56.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Farglory FTZ Investment vs. Tainet Communication System
Performance |
| Timeline |
| Farglory FTZ Investment |
| Tainet Communication |
Farglory FTZ and Tainet Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farglory FTZ and Tainet Communication
The main advantage of trading using opposite Farglory FTZ and Tainet Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farglory FTZ position performs unexpectedly, Tainet Communication can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Tainet Communication will offset losses from the drop in Tainet Communication's long position.| Farglory FTZ vs. Yulon Motor Co | Farglory FTZ vs. Far Eastern Department | Farglory FTZ vs. China Steel Corp | Farglory FTZ vs. Chang Hwa Commercial |
| Tainet Communication vs. Accton Technology Corp | Tainet Communication vs. Wistron NeWeb Corp | Tainet Communication vs. Arcadyan Technology Corp | Tainet Communication vs. Sercomm Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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