Correlation Between Formosa Petrochemical and Apex Biotechnology
Can any of the company-specific risk be diversified away by investing in both Formosa Petrochemical and Apex Biotechnology 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 Formosa Petrochemical and Apex Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Formosa Petrochemical Corp and Apex Biotechnology Corp, you can compare the effects of market volatilities on Formosa Petrochemical and Apex Biotechnology 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 Formosa Petrochemical with a short position of Apex Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Formosa Petrochemical and Apex Biotechnology.
Diversification Opportunities for Formosa Petrochemical and Apex Biotechnology
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Formosa and Apex is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Formosa Petrochemical Corp and Apex Biotechnology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apex Biotechnology Corp and Formosa Petrochemical 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 Formosa Petrochemical Corp are associated (or correlated) with Apex Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apex Biotechnology Corp has no effect on the direction of Formosa Petrochemical i.e., Formosa Petrochemical and Apex Biotechnology go up and down completely randomly.
Pair Corralation between Formosa Petrochemical and Apex Biotechnology
Assuming the 90 days trading horizon Formosa Petrochemical Corp is expected to under-perform the Apex Biotechnology. In addition to that, Formosa Petrochemical is 1.1 times more volatile than Apex Biotechnology Corp. It trades about -0.12 of its total potential returns per unit of risk. Apex Biotechnology Corp is currently generating about -0.01 per unit of volatility. If you would invest 3,385 in Apex Biotechnology Corp on December 11, 2024 and sell it today you would lose (250.00) from holding Apex Biotechnology Corp or give up 7.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Formosa Petrochemical Corp vs. Apex Biotechnology Corp
Performance |
| Timeline |
| Formosa Petrochemical |
| Apex Biotechnology Corp |
Formosa Petrochemical and Apex Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Formosa Petrochemical and Apex Biotechnology
The main advantage of trading using opposite Formosa Petrochemical and Apex Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Formosa Petrochemical position performs unexpectedly, Apex Biotechnology 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 Apex Biotechnology will offset losses from the drop in Apex Biotechnology's long position.| Formosa Petrochemical vs. ANJI Technology Co | ||
| Formosa Petrochemical vs. Standard Foods Corp | ||
| Formosa Petrochemical vs. Maxigen Biotech | ||
| Formosa Petrochemical vs. Lian Hwa Foods |
| Apex Biotechnology vs. Grape King Bio | ||
| Apex Biotechnology vs. Standard Chemical Pharmaceutical | ||
| Apex Biotechnology vs. China Steel Chemical | ||
| Apex Biotechnology vs. Sinphar Pharmaceutical 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |