Correlation Between Feng Tay and Eclat Textile
Can any of the company-specific risk be diversified away by investing in both Feng Tay and Eclat Textile 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 Eclat Textile 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 Eclat Textile Co, you can compare the effects of market volatilities on Feng Tay and Eclat Textile 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 Eclat Textile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Feng Tay and Eclat Textile.
Diversification Opportunities for Feng Tay and Eclat Textile
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Feng and Eclat is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Feng Tay Enterprises and Eclat Textile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eclat Textile 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 Eclat Textile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eclat Textile has no effect on the direction of Feng Tay i.e., Feng Tay and Eclat Textile go up and down completely randomly.
Pair Corralation between Feng Tay and Eclat Textile
Assuming the 90 days trading horizon Feng Tay Enterprises is expected to under-perform the Eclat Textile. But the stock apears to be less risky and, when comparing its historical volatility, Feng Tay Enterprises is 1.07 times less risky than Eclat Textile. The stock trades about -0.06 of its potential returns per unit of risk. The Eclat Textile Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 51,500 in Eclat Textile Co on August 25, 2024 and sell it today you would earn a total of 2,900 from holding Eclat Textile Co or generate 5.63% 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. Eclat Textile Co
Performance |
| Timeline |
| Feng Tay Enterprises |
| Eclat Textile |
Feng Tay and Eclat Textile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Feng Tay and Eclat Textile
The main advantage of trading using opposite Feng Tay and Eclat Textile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Feng Tay position performs unexpectedly, Eclat Textile 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 Eclat Textile will offset losses from the drop in Eclat Textile's long position.| Feng Tay vs. Pou Chen Corp | Feng Tay vs. Eclat Textile Co | Feng Tay vs. Hotai Motor Co | Feng Tay vs. Giant Manufacturing Co |
| Eclat Textile vs. Makalot Industrial Co | Eclat Textile vs. Feng Tay Enterprises | Eclat Textile vs. President Chain Store | Eclat Textile vs. Uni President Enterprises 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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