Correlation Between Forsys Metals and Wenzhou Kangning
Can any of the company-specific risk be diversified away by investing in both Forsys Metals and Wenzhou Kangning 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 Forsys Metals and Wenzhou Kangning into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forsys Metals Corp and Wenzhou Kangning Hospital, you can compare the effects of market volatilities on Forsys Metals and Wenzhou Kangning 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 Forsys Metals with a short position of Wenzhou Kangning. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forsys Metals and Wenzhou Kangning.
Diversification Opportunities for Forsys Metals and Wenzhou Kangning
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Forsys and Wenzhou is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Forsys Metals Corp and Wenzhou Kangning Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wenzhou Kangning Hospital and Forsys Metals 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 Forsys Metals Corp are associated (or correlated) with Wenzhou Kangning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wenzhou Kangning Hospital has no effect on the direction of Forsys Metals i.e., Forsys Metals and Wenzhou Kangning go up and down completely randomly.
Pair Corralation between Forsys Metals and Wenzhou Kangning
Assuming the 90 days horizon Forsys Metals Corp is expected to generate 3.96 times more return on investment than Wenzhou Kangning. However, Forsys Metals is 3.96 times more volatile than Wenzhou Kangning Hospital. It trades about 0.15 of its potential returns per unit of risk. Wenzhou Kangning Hospital is currently generating about -0.24 per unit of risk. If you would invest 42.00 in Forsys Metals Corp on October 12, 2024 and sell it today you would earn a total of 6.00 from holding Forsys Metals Corp or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Forsys Metals Corp vs. Wenzhou Kangning Hospital
Performance |
| Timeline |
| Forsys Metals Corp |
| Wenzhou Kangning Hospital |
Forsys Metals and Wenzhou Kangning Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forsys Metals and Wenzhou Kangning
The main advantage of trading using opposite Forsys Metals and Wenzhou Kangning positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forsys Metals position performs unexpectedly, Wenzhou Kangning 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 Wenzhou Kangning will offset losses from the drop in Wenzhou Kangning's long position.| Forsys Metals vs. GBS Software AG | Forsys Metals vs. Alfa Financial Software | Forsys Metals vs. Wayside Technology Group | Forsys Metals vs. Beta Systems Software |
| Wenzhou Kangning vs. Forsys Metals Corp | Wenzhou Kangning vs. Corporate Office Properties | Wenzhou Kangning vs. Harmony Gold Mining | Wenzhou Kangning vs. LANDSEA GREEN MANAGEMENT |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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