Correlation Between Farglory FTZ and Zimmite Taiwan
Can any of the company-specific risk be diversified away by investing in both Farglory FTZ and Zimmite Taiwan 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 Zimmite Taiwan 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 Zimmite Taiwan, you can compare the effects of market volatilities on Farglory FTZ and Zimmite Taiwan 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 Zimmite Taiwan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farglory FTZ and Zimmite Taiwan.
Diversification Opportunities for Farglory FTZ and Zimmite Taiwan
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Farglory and Zimmite is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Farglory FTZ Investment and Zimmite Taiwan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zimmite Taiwan 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 Zimmite Taiwan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zimmite Taiwan has no effect on the direction of Farglory FTZ i.e., Farglory FTZ and Zimmite Taiwan go up and down completely randomly.
Pair Corralation between Farglory FTZ and Zimmite Taiwan
Assuming the 90 days trading horizon Farglory FTZ Investment is expected to generate 1.85 times more return on investment than Zimmite Taiwan. However, Farglory FTZ is 1.85 times more volatile than Zimmite Taiwan. It trades about 0.17 of its potential returns per unit of risk. Zimmite Taiwan is currently generating about -0.05 per unit of risk. If you would invest 4,350 in Farglory FTZ Investment on September 13, 2024 and sell it today you would earn a total of 225.00 from holding Farglory FTZ Investment or generate 5.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Farglory FTZ Investment vs. Zimmite Taiwan
Performance |
| Timeline |
| Farglory FTZ Investment |
| Zimmite Taiwan |
Farglory FTZ and Zimmite Taiwan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farglory FTZ and Zimmite Taiwan
The main advantage of trading using opposite Farglory FTZ and Zimmite Taiwan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farglory FTZ position performs unexpectedly, Zimmite Taiwan 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 Zimmite Taiwan will offset losses from the drop in Zimmite Taiwan'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 |
| Zimmite Taiwan vs. Formosan Rubber Group | Zimmite Taiwan vs. Victory New Materials | Zimmite Taiwan vs. Materials Analysis Technology | Zimmite Taiwan vs. Ruentex Materials 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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