Correlation Between Pou Chen and Fulgent Sun
Can any of the company-specific risk be diversified away by investing in both Pou Chen and Fulgent Sun 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 Pou Chen and Fulgent Sun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pou Chen Corp and Fulgent Sun International, you can compare the effects of market volatilities on Pou Chen and Fulgent Sun 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 Pou Chen with a short position of Fulgent Sun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pou Chen and Fulgent Sun.
Diversification Opportunities for Pou Chen and Fulgent Sun
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pou and Fulgent is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Pou Chen Corp and Fulgent Sun International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fulgent Sun International and Pou Chen 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 Pou Chen Corp are associated (or correlated) with Fulgent Sun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fulgent Sun International has no effect on the direction of Pou Chen i.e., Pou Chen and Fulgent Sun go up and down completely randomly.
Pair Corralation between Pou Chen and Fulgent Sun
Assuming the 90 days trading horizon Pou Chen Corp is expected to generate 0.89 times more return on investment than Fulgent Sun. However, Pou Chen Corp is 1.12 times less risky than Fulgent Sun. It trades about 0.41 of its potential returns per unit of risk. Fulgent Sun International is currently generating about 0.05 per unit of risk. If you would invest 3,740 in Pou Chen Corp on August 26, 2024 and sell it today you would earn a total of 620.00 from holding Pou Chen Corp or generate 16.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pou Chen Corp vs. Fulgent Sun International
Performance |
| Timeline |
| Pou Chen Corp |
| Fulgent Sun International |
Pou Chen and Fulgent Sun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pou Chen and Fulgent Sun
The main advantage of trading using opposite Pou Chen and Fulgent Sun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pou Chen position performs unexpectedly, Fulgent Sun 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 Fulgent Sun will offset losses from the drop in Fulgent Sun's long position.| Pou Chen vs. Taiwan Semiconductor Manufacturing | Pou Chen vs. Hon Hai Precision | Pou Chen vs. MediaTek | Pou Chen vs. Chunghwa Telecom Co |
| Fulgent Sun vs. Feng Tay Enterprises | Fulgent Sun vs. Pou Chen Corp | Fulgent Sun vs. Taiwan Paiho | Fulgent Sun vs. Merida Industry 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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