Correlation Between Flexium Interconnect and Global Brands
Can any of the company-specific risk be diversified away by investing in both Flexium Interconnect and Global Brands 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 Flexium Interconnect and Global Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flexium Interconnect and Global Brands Manufacture, you can compare the effects of market volatilities on Flexium Interconnect and Global Brands 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 Flexium Interconnect with a short position of Global Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flexium Interconnect and Global Brands.
Diversification Opportunities for Flexium Interconnect and Global Brands
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Flexium and Global is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Flexium Interconnect and Global Brands Manufacture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Brands Manufacture and Flexium Interconnect 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 Flexium Interconnect are associated (or correlated) with Global Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Brands Manufacture has no effect on the direction of Flexium Interconnect i.e., Flexium Interconnect and Global Brands go up and down completely randomly.
Pair Corralation between Flexium Interconnect and Global Brands
Assuming the 90 days trading horizon Flexium Interconnect is expected to under-perform the Global Brands. But the stock apears to be less risky and, when comparing its historical volatility, Flexium Interconnect is 1.42 times less risky than Global Brands. The stock trades about -0.05 of its potential returns per unit of risk. The Global Brands Manufacture is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,790 in Global Brands Manufacture on September 3, 2024 and sell it today you would earn a total of 2,660 from holding Global Brands Manufacture or generate 95.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flexium Interconnect vs. Global Brands Manufacture
Performance |
| Timeline |
| Flexium Interconnect |
| Global Brands Manufacture |
Flexium Interconnect and Global Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flexium Interconnect and Global Brands
The main advantage of trading using opposite Flexium Interconnect and Global Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flexium Interconnect position performs unexpectedly, Global Brands 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 Global Brands will offset losses from the drop in Global Brands' long position.| Flexium Interconnect vs. Zhen Ding Technology | Flexium Interconnect vs. Catcher Technology Co | Flexium Interconnect vs. Unimicron Technology Corp | Flexium Interconnect vs. Career Technology MFG |
| Global Brands vs. Taiwan Semiconductor Manufacturing | Global Brands vs. Yang Ming Marine | Global Brands vs. ASE Industrial Holding | Global Brands vs. AU Optronics |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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