Correlation Between Sporton International and Feng Ching
Can any of the company-specific risk be diversified away by investing in both Sporton International and Feng Ching 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 Sporton International and Feng Ching into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sporton International and Feng Ching Metal, you can compare the effects of market volatilities on Sporton International and Feng Ching 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 Sporton International with a short position of Feng Ching. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sporton International and Feng Ching.
Diversification Opportunities for Sporton International and Feng Ching
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sporton and Feng is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Sporton International and Feng Ching Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Feng Ching Metal and Sporton International 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 Sporton International are associated (or correlated) with Feng Ching. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Feng Ching Metal has no effect on the direction of Sporton International i.e., Sporton International and Feng Ching go up and down completely randomly.
Pair Corralation between Sporton International and Feng Ching
Assuming the 90 days trading horizon Sporton International is expected to generate 2.52 times less return on investment than Feng Ching. But when comparing it to its historical volatility, Sporton International is 1.86 times less risky than Feng Ching. It trades about 0.25 of its potential returns per unit of risk. Feng Ching Metal is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 1,710 in Feng Ching Metal on November 28, 2024 and sell it today you would earn a total of 295.00 from holding Feng Ching Metal or generate 17.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sporton International vs. Feng Ching Metal
Performance |
| Timeline |
| Sporton International |
| Feng Ching Metal |
Sporton International and Feng Ching Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sporton International and Feng Ching
The main advantage of trading using opposite Sporton International and Feng Ching positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sporton International position performs unexpectedly, Feng Ching 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 Feng Ching will offset losses from the drop in Feng Ching's long position.| Sporton International vs. Farglory FTZ Investment | Sporton International vs. Trade Van Information Services | Sporton International vs. Choice Development | Sporton International vs. TMP Steel |
| Feng Ching vs. Da Cin Construction Co | Feng Ching vs. China Construction Bank | Feng Ching vs. Lihtai Construction Enterprise | Feng Ching vs. Advanced Wireless Semiconductor |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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