Correlation Between Kuo Toong and Fulltech Fiber
Can any of the company-specific risk be diversified away by investing in both Kuo Toong and Fulltech Fiber 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 Kuo Toong and Fulltech Fiber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kuo Toong International and Fulltech Fiber Glass, you can compare the effects of market volatilities on Kuo Toong and Fulltech Fiber 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 Kuo Toong with a short position of Fulltech Fiber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuo Toong and Fulltech Fiber.
Diversification Opportunities for Kuo Toong and Fulltech Fiber
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kuo and Fulltech is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Kuo Toong International and Fulltech Fiber Glass in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fulltech Fiber Glass and Kuo Toong 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 Kuo Toong International are associated (or correlated) with Fulltech Fiber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fulltech Fiber Glass has no effect on the direction of Kuo Toong i.e., Kuo Toong and Fulltech Fiber go up and down completely randomly.
Pair Corralation between Kuo Toong and Fulltech Fiber
Assuming the 90 days trading horizon Kuo Toong International is expected to under-perform the Fulltech Fiber. But the stock apears to be less risky and, when comparing its historical volatility, Kuo Toong International is 1.65 times less risky than Fulltech Fiber. The stock trades about -0.25 of its potential returns per unit of risk. The Fulltech Fiber Glass is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 2,155 in Fulltech Fiber Glass on September 4, 2024 and sell it today you would earn a total of 595.00 from holding Fulltech Fiber Glass or generate 27.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kuo Toong International vs. Fulltech Fiber Glass
Performance |
| Timeline |
| Kuo Toong International |
| Fulltech Fiber Glass |
Kuo Toong and Fulltech Fiber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kuo Toong and Fulltech Fiber
The main advantage of trading using opposite Kuo Toong and Fulltech Fiber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kuo Toong position performs unexpectedly, Fulltech Fiber 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 Fulltech Fiber will offset losses from the drop in Fulltech Fiber's long position.| Kuo Toong vs. Ruentex Engineering Construction | Kuo Toong vs. Century Wind Power | Kuo Toong vs. BES Engineering Co | Kuo Toong vs. Da Cin Construction Co |
| Fulltech Fiber vs. New Era Electronics | Fulltech Fiber vs. Rich Development Co | Fulltech Fiber vs. Yem Chio Co | Fulltech Fiber vs. Kuo Toong International |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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