Correlation Between Fittech and Globaltek Fabrication
Can any of the company-specific risk be diversified away by investing in both Fittech and Globaltek Fabrication 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 Fittech and Globaltek Fabrication into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fittech Co and Globaltek Fabrication Co, you can compare the effects of market volatilities on Fittech and Globaltek Fabrication 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 Fittech with a short position of Globaltek Fabrication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fittech and Globaltek Fabrication.
Diversification Opportunities for Fittech and Globaltek Fabrication
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fittech and Globaltek is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Fittech Co and Globaltek Fabrication Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globaltek Fabrication and Fittech 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 Fittech Co are associated (or correlated) with Globaltek Fabrication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globaltek Fabrication has no effect on the direction of Fittech i.e., Fittech and Globaltek Fabrication go up and down completely randomly.
Pair Corralation between Fittech and Globaltek Fabrication
Assuming the 90 days trading horizon Fittech Co is expected to generate 0.99 times more return on investment than Globaltek Fabrication. However, Fittech Co is 1.01 times less risky than Globaltek Fabrication. It trades about 0.05 of its potential returns per unit of risk. Globaltek Fabrication Co is currently generating about 0.04 per unit of risk. If you would invest 8,927 in Fittech Co on September 3, 2024 and sell it today you would earn a total of 5,923 from holding Fittech Co or generate 66.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fittech Co vs. Globaltek Fabrication Co
Performance |
| Timeline |
| Fittech |
| Globaltek Fabrication |
Fittech and Globaltek Fabrication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fittech and Globaltek Fabrication
The main advantage of trading using opposite Fittech and Globaltek Fabrication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fittech position performs unexpectedly, Globaltek Fabrication 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 Globaltek Fabrication will offset losses from the drop in Globaltek Fabrication's long position.| Fittech vs. Highlight Tech | Fittech vs. WiseChip Semiconductor | Fittech vs. Novatek Microelectronics Corp | Fittech vs. Leader Electronics |
| Globaltek Fabrication vs. SCI Pharmtech | Globaltek Fabrication vs. ZongTai Real Estate | Globaltek Fabrication vs. Ying Han Technology | Globaltek Fabrication vs. Tripod Technology Corp |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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