Correlation Between Tait Marketing and FDC International
Can any of the company-specific risk be diversified away by investing in both Tait Marketing and FDC International 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 Tait Marketing and FDC International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tait Marketing Distribution and FDC International Hotels, you can compare the effects of market volatilities on Tait Marketing and FDC International 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 Tait Marketing with a short position of FDC International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tait Marketing and FDC International.
Diversification Opportunities for Tait Marketing and FDC International
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tait and FDC is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Tait Marketing Distribution and FDC International Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FDC International Hotels and Tait Marketing 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 Tait Marketing Distribution are associated (or correlated) with FDC International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FDC International Hotels has no effect on the direction of Tait Marketing i.e., Tait Marketing and FDC International go up and down completely randomly.
Pair Corralation between Tait Marketing and FDC International
Assuming the 90 days trading horizon Tait Marketing is expected to generate 4.64 times less return on investment than FDC International. But when comparing it to its historical volatility, Tait Marketing Distribution is 2.79 times less risky than FDC International. It trades about 0.06 of its potential returns per unit of risk. FDC International Hotels is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 6,030 in FDC International Hotels on September 2, 2024 and sell it today you would earn a total of 140.00 from holding FDC International Hotels or generate 2.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tait Marketing Distribution vs. FDC International Hotels
Performance |
| Timeline |
| Tait Marketing Distr |
| FDC International Hotels |
Tait Marketing and FDC International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tait Marketing and FDC International
The main advantage of trading using opposite Tait Marketing and FDC International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tait Marketing position performs unexpectedly, FDC International 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 FDC International will offset losses from the drop in FDC International's long position.| Tait Marketing vs. YuantaP shares Taiwan Top | Tait Marketing vs. YuantaP shares Taiwan Electronics | Tait Marketing vs. YuantaP shares Taiwan Mid Cap | Tait Marketing vs. Fubon MSCI Taiwan |
| FDC International vs. Chaintech Technology Corp | FDC International vs. Avision | FDC International vs. Clevo Co | FDC International vs. Elitegroup Computer Systems |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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