Correlation Between Farglory FTZ and CKM Building
Can any of the company-specific risk be diversified away by investing in both Farglory FTZ and CKM Building 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 CKM Building 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 CKM Building Material, you can compare the effects of market volatilities on Farglory FTZ and CKM Building 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 CKM Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farglory FTZ and CKM Building.
Diversification Opportunities for Farglory FTZ and CKM Building
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Farglory and CKM is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Farglory FTZ Investment and CKM Building Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CKM Building Material 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 CKM Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CKM Building Material has no effect on the direction of Farglory FTZ i.e., Farglory FTZ and CKM Building go up and down completely randomly.
Pair Corralation between Farglory FTZ and CKM Building
Assuming the 90 days trading horizon Farglory FTZ Investment is expected to under-perform the CKM Building. But the stock apears to be less risky and, when comparing its historical volatility, Farglory FTZ Investment is 1.03 times less risky than CKM Building. The stock trades about -0.02 of its potential returns per unit of risk. The CKM Building Material is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 3,440 in CKM Building Material on October 26, 2024 and sell it today you would earn a total of 155.00 from holding CKM Building Material or generate 4.51% 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. CKM Building Material
Performance |
| Timeline |
| Farglory FTZ Investment |
| CKM Building Material |
Farglory FTZ and CKM Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farglory FTZ and CKM Building
The main advantage of trading using opposite Farglory FTZ and CKM Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farglory FTZ position performs unexpectedly, CKM Building 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 CKM Building will offset losses from the drop in CKM Building's long position.| Farglory FTZ vs. Evergreen International Storage | Farglory FTZ vs. China Container Terminal | Farglory FTZ vs. Sincere Navigation Corp | Farglory FTZ vs. CSBC Corp Taiwan |
| CKM Building vs. Farglory FTZ Investment | CKM Building vs. Elitegroup Computer Systems | CKM Building vs. WinMate Communication INC | CKM Building vs. Mercuries Life Insurance |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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