Correlation Between Fu Burg and Chain Chon
Can any of the company-specific risk be diversified away by investing in both Fu Burg and Chain Chon 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 Fu Burg and Chain Chon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fu Burg Industrial and Chain Chon Industrial, you can compare the effects of market volatilities on Fu Burg and Chain Chon 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 Fu Burg with a short position of Chain Chon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fu Burg and Chain Chon.
Diversification Opportunities for Fu Burg and Chain Chon
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 8929 and Chain is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Fu Burg Industrial and Chain Chon Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chain Chon Industrial and Fu Burg 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 Fu Burg Industrial are associated (or correlated) with Chain Chon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chain Chon Industrial has no effect on the direction of Fu Burg i.e., Fu Burg and Chain Chon go up and down completely randomly.
Pair Corralation between Fu Burg and Chain Chon
Assuming the 90 days trading horizon Fu Burg Industrial is expected to generate 1.33 times more return on investment than Chain Chon. However, Fu Burg is 1.33 times more volatile than Chain Chon Industrial. It trades about 0.06 of its potential returns per unit of risk. Chain Chon Industrial is currently generating about 0.01 per unit of risk. If you would invest 2,175 in Fu Burg Industrial on September 2, 2024 and sell it today you would earn a total of 1,220 from holding Fu Burg Industrial or generate 56.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fu Burg Industrial vs. Chain Chon Industrial
Performance |
| Timeline |
| Fu Burg Industrial |
| Chain Chon Industrial |
Fu Burg and Chain Chon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fu Burg and Chain Chon
The main advantage of trading using opposite Fu Burg and Chain Chon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fu Burg position performs unexpectedly, Chain Chon 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 Chain Chon will offset losses from the drop in Chain Chon's long position.| Fu Burg vs. Gloria Material Technology | Fu Burg vs. Wei Chih Steel | Fu Burg vs. Daxin Materials Corp | Fu Burg vs. Nankang Rubber Tire |
| Chain Chon vs. Trade Van Information Services | Chain Chon vs. C Media Electronics | Chain Chon vs. Mitake Information | Chain Chon vs. Pili International Multimedia |
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.
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