Correlation Between Advanced Energy and Feng Tay
Can any of the company-specific risk be diversified away by investing in both Advanced Energy and Feng Tay 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 Advanced Energy and Feng Tay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Energy Solution and Feng Tay Enterprises, you can compare the effects of market volatilities on Advanced Energy and Feng Tay 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 Advanced Energy with a short position of Feng Tay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Energy and Feng Tay.
Diversification Opportunities for Advanced Energy and Feng Tay
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Advanced and Feng is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Energy Solution and Feng Tay Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Feng Tay Enterprises and Advanced Energy 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 Advanced Energy Solution are associated (or correlated) with Feng Tay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Feng Tay Enterprises has no effect on the direction of Advanced Energy i.e., Advanced Energy and Feng Tay go up and down completely randomly.
Pair Corralation between Advanced Energy and Feng Tay
Assuming the 90 days trading horizon Advanced Energy Solution is expected to under-perform the Feng Tay. In addition to that, Advanced Energy is 2.19 times more volatile than Feng Tay Enterprises. It trades about -0.2 of its total potential returns per unit of risk. Feng Tay Enterprises is currently generating about 0.18 per unit of volatility. If you would invest 12,800 in Feng Tay Enterprises on November 27, 2024 and sell it today you would earn a total of 700.00 from holding Feng Tay Enterprises or generate 5.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Energy Solution vs. Feng Tay Enterprises
Performance |
| Timeline |
| Advanced Energy Solution |
| Feng Tay Enterprises |
Advanced Energy and Feng Tay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Energy and Feng Tay
The main advantage of trading using opposite Advanced Energy and Feng Tay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Energy position performs unexpectedly, Feng Tay 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 Feng Tay will offset losses from the drop in Feng Tay's long position.| Advanced Energy vs. Nan Ya Printed | Advanced Energy vs. Lotes Co | Advanced Energy vs. eMemory Technology | Advanced Energy vs. Alchip Technologies |
| Feng Tay vs. Pou Chen Corp | Feng Tay vs. Eclat Textile Co | Feng Tay vs. Hotai Motor Co | Feng Tay vs. Giant Manufacturing 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 Stocks Directory module to find actively traded stocks across global markets.
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