Correlation Between China Galaxy and FDCTech
Can any of the company-specific risk be diversified away by investing in both China Galaxy and FDCTech 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 China Galaxy and FDCTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Galaxy Securities and FDCTech, you can compare the effects of market volatilities on China Galaxy and FDCTech 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 China Galaxy with a short position of FDCTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Galaxy and FDCTech.
Diversification Opportunities for China Galaxy and FDCTech
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and FDCTech is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding China Galaxy Securities and FDCTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FDCTech and China Galaxy 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 China Galaxy Securities are associated (or correlated) with FDCTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FDCTech has no effect on the direction of China Galaxy i.e., China Galaxy and FDCTech go up and down completely randomly.
Pair Corralation between China Galaxy and FDCTech
If you would invest 0.70 in FDCTech on September 1, 2024 and sell it today you would lose (0.20) from holding FDCTech or give up 28.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
China Galaxy Securities vs. FDCTech
Performance |
| Timeline |
| China Galaxy Securities |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| FDCTech |
China Galaxy and FDCTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Galaxy and FDCTech
The main advantage of trading using opposite China Galaxy and FDCTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Galaxy position performs unexpectedly, FDCTech 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 FDCTech will offset losses from the drop in FDCTech's long position.| China Galaxy vs. Evercore Partners | China Galaxy vs. Lazard | China Galaxy vs. Moelis Co | China Galaxy vs. PJT Partners |
| FDCTech vs. Armada Mercantile | FDCTech vs. Cal Bay Intl | FDCTech vs. BlockchainK2 Corp | FDCTech vs. Ameritrust 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |