Correlation Between Feng Tay and Tainan Enterprises
Can any of the company-specific risk be diversified away by investing in both Feng Tay and Tainan Enterprises 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 Feng Tay and Tainan Enterprises into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Feng Tay Enterprises and Tainan Enterprises Co, you can compare the effects of market volatilities on Feng Tay and Tainan Enterprises 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 Feng Tay with a short position of Tainan Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of Feng Tay and Tainan Enterprises.
Diversification Opportunities for Feng Tay and Tainan Enterprises
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Feng and Tainan is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Feng Tay Enterprises and Tainan Enterprises Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tainan Enterprises and Feng Tay 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 Feng Tay Enterprises are associated (or correlated) with Tainan Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tainan Enterprises has no effect on the direction of Feng Tay i.e., Feng Tay and Tainan Enterprises go up and down completely randomly.
Pair Corralation between Feng Tay and Tainan Enterprises
Assuming the 90 days trading horizon Feng Tay Enterprises is expected to generate 1.94 times more return on investment than Tainan Enterprises. However, Feng Tay is 1.94 times more volatile than Tainan Enterprises Co. It trades about 0.13 of its potential returns per unit of risk. Tainan Enterprises Co is currently generating about -0.11 per unit of risk. If you would invest 13,300 in Feng Tay Enterprises on September 19, 2024 and sell it today you would earn a total of 750.00 from holding Feng Tay Enterprises or generate 5.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Feng Tay Enterprises vs. Tainan Enterprises Co
Performance |
| Timeline |
| Feng Tay Enterprises |
| Tainan Enterprises |
Feng Tay and Tainan Enterprises Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Feng Tay and Tainan Enterprises
The main advantage of trading using opposite Feng Tay and Tainan Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Feng Tay position performs unexpectedly, Tainan Enterprises 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 Tainan Enterprises will offset losses from the drop in Tainan Enterprises' long position.| Feng Tay vs. Ruentex Development Co | Feng Tay vs. WiseChip Semiconductor | Feng Tay vs. Novatek Microelectronics Corp | Feng Tay vs. Leader Electronics |
| Tainan Enterprises vs. Feng Tay Enterprises | Tainan Enterprises vs. Ruentex Development Co | Tainan Enterprises vs. WiseChip Semiconductor | Tainan Enterprises vs. Novatek Microelectronics Corp |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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