Correlation Between Farglory FTZ and Aker Technology
Can any of the company-specific risk be diversified away by investing in both Farglory FTZ and Aker Technology 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 Aker Technology 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 Aker Technology Co, you can compare the effects of market volatilities on Farglory FTZ and Aker Technology 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 Aker Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farglory FTZ and Aker Technology.
Diversification Opportunities for Farglory FTZ and Aker Technology
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Farglory and Aker is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Farglory FTZ Investment and Aker Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aker Technology 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 Aker Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aker Technology has no effect on the direction of Farglory FTZ i.e., Farglory FTZ and Aker Technology go up and down completely randomly.
Pair Corralation between Farglory FTZ and Aker Technology
Assuming the 90 days trading horizon Farglory FTZ Investment is expected to under-perform the Aker Technology. But the stock apears to be less risky and, when comparing its historical volatility, Farglory FTZ Investment is 1.53 times less risky than Aker Technology. The stock trades about -0.05 of its potential returns per unit of risk. The Aker Technology Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,295 in Aker Technology Co on September 14, 2024 and sell it today you would earn a total of 95.00 from holding Aker Technology Co or generate 4.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Farglory FTZ Investment vs. Aker Technology Co
Performance |
| Timeline |
| Farglory FTZ Investment |
| Aker Technology |
Farglory FTZ and Aker Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farglory FTZ and Aker Technology
The main advantage of trading using opposite Farglory FTZ and Aker Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farglory FTZ position performs unexpectedly, Aker Technology 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 Aker Technology will offset losses from the drop in Aker Technology's long position.| Farglory FTZ vs. Yang Ming Marine | Farglory FTZ vs. Wan Hai Lines | Farglory FTZ vs. U Ming Marine Transport | Farglory FTZ vs. Taiwan Navigation Co |
| Aker Technology vs. Materials Analysis Technology | Aker Technology vs. Genovate Biotechnology Co | Aker Technology vs. Shan Loong Transportation Co | Aker Technology vs. Thermaltake Technology Co |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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