Correlation Between Fun Yours and China Steel
Can any of the company-specific risk be diversified away by investing in both Fun Yours and China Steel 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 Fun Yours and China Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fun Yours Technology and China Steel Corp, you can compare the effects of market volatilities on Fun Yours and China Steel 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 Fun Yours with a short position of China Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fun Yours and China Steel.
Diversification Opportunities for Fun Yours and China Steel
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fun and China is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Fun Yours Technology and China Steel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Steel Corp and Fun Yours 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 Fun Yours Technology are associated (or correlated) with China Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Steel Corp has no effect on the direction of Fun Yours i.e., Fun Yours and China Steel go up and down completely randomly.
Pair Corralation between Fun Yours and China Steel
Assuming the 90 days trading horizon Fun Yours Technology is expected to generate 1.35 times more return on investment than China Steel. However, Fun Yours is 1.35 times more volatile than China Steel Corp. It trades about -0.06 of its potential returns per unit of risk. China Steel Corp is currently generating about -0.34 per unit of risk. If you would invest 5,070 in Fun Yours Technology on September 12, 2024 and sell it today you would lose (130.00) from holding Fun Yours Technology or give up 2.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fun Yours Technology vs. China Steel Corp
Performance |
| Timeline |
| Fun Yours Technology |
| China Steel Corp |
Fun Yours and China Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fun Yours and China Steel
The main advantage of trading using opposite Fun Yours and China Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fun Yours position performs unexpectedly, China Steel 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 China Steel will offset losses from the drop in China Steel's long position.| Fun Yours vs. Cheng Mei Materials | Fun Yours vs. Lemtech Holdings Co | Fun Yours vs. Chia Chang Co | Fun Yours vs. Ruentex Development Co |
| China Steel vs. Tainan Spinning Co | China Steel vs. Lealea Enterprise Co | China Steel vs. China Petrochemical Development | China Steel vs. Ruentex Development Co |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |