Correlation Between Feng Tay and Federal Corp
Can any of the company-specific risk be diversified away by investing in both Feng Tay and Federal Corp 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 Federal Corp 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 Federal Corp, you can compare the effects of market volatilities on Feng Tay and Federal Corp 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 Federal Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Feng Tay and Federal Corp.
Diversification Opportunities for Feng Tay and Federal Corp
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Feng and Federal is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Feng Tay Enterprises and Federal Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Corp 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 Federal Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Corp has no effect on the direction of Feng Tay i.e., Feng Tay and Federal Corp go up and down completely randomly.
Pair Corralation between Feng Tay and Federal Corp
If you would invest 13,550 in Feng Tay Enterprises on September 15, 2024 and sell it today you would earn a total of 350.00 from holding Feng Tay Enterprises or generate 2.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Feng Tay Enterprises vs. Federal Corp
Performance |
| Timeline |
| Feng Tay Enterprises |
| Federal Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Feng Tay and Federal Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Feng Tay and Federal Corp
The main advantage of trading using opposite Feng Tay and Federal Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Feng Tay position performs unexpectedly, Federal Corp 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 Federal Corp will offset losses from the drop in Federal Corp's long position.| Feng Tay vs. Ruentex Development Co | Feng Tay vs. WiseChip Semiconductor | Feng Tay vs. Novatek Microelectronics Corp | Feng Tay vs. Leader Electronics |
| Federal Corp vs. Nankang Rubber Tire | Federal Corp vs. Kenda Rubber Industrial | Federal Corp vs. Formosan Rubber Group | Federal Corp vs. Yulon Motor 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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