Correlation Between Antec and Formosa International
Can any of the company-specific risk be diversified away by investing in both Antec and Formosa 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 Antec and Formosa International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Antec Inc and Formosa International Hotels, you can compare the effects of market volatilities on Antec and Formosa 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 Antec with a short position of Formosa International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antec and Formosa International.
Diversification Opportunities for Antec and Formosa International
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Antec and Formosa is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Antec Inc and Formosa International Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formosa International and Antec 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 Antec Inc are associated (or correlated) with Formosa International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formosa International has no effect on the direction of Antec i.e., Antec and Formosa International go up and down completely randomly.
Pair Corralation between Antec and Formosa International
Assuming the 90 days trading horizon Antec Inc is expected to generate 2.42 times more return on investment than Formosa International. However, Antec is 2.42 times more volatile than Formosa International Hotels. It trades about 0.06 of its potential returns per unit of risk. Formosa International Hotels is currently generating about -0.02 per unit of risk. If you would invest 1,410 in Antec Inc on August 30, 2024 and sell it today you would earn a total of 1,950 from holding Antec Inc or generate 138.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Antec Inc vs. Formosa International Hotels
Performance |
| Timeline |
| Antec Inc |
| Formosa International |
Antec and Formosa International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Antec and Formosa International
The main advantage of trading using opposite Antec and Formosa International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Antec position performs unexpectedly, Formosa 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 Formosa International will offset losses from the drop in Formosa International's long position.| Antec vs. AVer Information | Antec vs. Dimerco Data System | Antec vs. U Media Communications | Antec vs. Otsuka Information Technology |
| Formosa International vs. Yulon Finance Corp | Formosa International vs. Taiwan Secom Co | Formosa International vs. Great Wall Enterprise |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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