Correlation Between Great China and Feng Ching
Can any of the company-specific risk be diversified away by investing in both Great China and Feng Ching 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 Great China and Feng Ching into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great China Metal and Feng Ching Metal, you can compare the effects of market volatilities on Great China and Feng Ching 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 Great China with a short position of Feng Ching. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great China and Feng Ching.
Diversification Opportunities for Great China and Feng Ching
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Great and Feng is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Great China Metal and Feng Ching Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Feng Ching Metal and Great China 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 Great China Metal are associated (or correlated) with Feng Ching. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Feng Ching Metal has no effect on the direction of Great China i.e., Great China and Feng Ching go up and down completely randomly.
Pair Corralation between Great China and Feng Ching
Assuming the 90 days trading horizon Great China Metal is expected to generate 0.27 times more return on investment than Feng Ching. However, Great China Metal is 3.67 times less risky than Feng Ching. It trades about 0.0 of its potential returns per unit of risk. Feng Ching Metal is currently generating about -0.05 per unit of risk. If you would invest 2,290 in Great China Metal on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Great China Metal or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great China Metal vs. Feng Ching Metal
Performance |
| Timeline |
| Great China Metal |
| Feng Ching Metal |
Great China and Feng Ching Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great China and Feng Ching
The main advantage of trading using opposite Great China and Feng Ching positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great China position performs unexpectedly, Feng Ching 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 Ching will offset losses from the drop in Feng Ching's long position.| Great China vs. Basso Industry Corp | Great China vs. Chung Hsin Electric Machinery | Great China vs. TYC Brother Industrial | Great China vs. TECO Electric Machinery |
| Feng Ching vs. Walsin Lihwa Corp | Feng Ching vs. Voltronic Power Technology | Feng Ching vs. Advanced Energy Solution | Feng Ching vs. Simplo Technology 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |