Correlation Between FARO Technologies and Chuangs China
Can any of the company-specific risk be diversified away by investing in both FARO Technologies and Chuangs China 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 FARO Technologies and Chuangs China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FARO Technologies and Chuangs China Investments, you can compare the effects of market volatilities on FARO Technologies and Chuangs China 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 FARO Technologies with a short position of Chuangs China. Check out your portfolio center. Please also check ongoing floating volatility patterns of FARO Technologies and Chuangs China.
Diversification Opportunities for FARO Technologies and Chuangs China
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between FARO and Chuangs is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding FARO Technologies and Chuangs China Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chuangs China Investments and FARO Technologies 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 FARO Technologies are associated (or correlated) with Chuangs China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chuangs China Investments has no effect on the direction of FARO Technologies i.e., FARO Technologies and Chuangs China go up and down completely randomly.
Pair Corralation between FARO Technologies and Chuangs China
Assuming the 90 days horizon FARO Technologies is expected to generate 0.75 times more return on investment than Chuangs China. However, FARO Technologies is 1.34 times less risky than Chuangs China. It trades about 0.01 of its potential returns per unit of risk. Chuangs China Investments is currently generating about -0.01 per unit of risk. If you would invest 2,922 in FARO Technologies on September 2, 2024 and sell it today you would lose (442.00) from holding FARO Technologies or give up 15.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FARO Technologies vs. Chuangs China Investments
Performance |
| Timeline |
| FARO Technologies |
| Chuangs China Investments |
FARO Technologies and Chuangs China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FARO Technologies and Chuangs China
The main advantage of trading using opposite FARO Technologies and Chuangs China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FARO Technologies position performs unexpectedly, Chuangs China 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 Chuangs China will offset losses from the drop in Chuangs China's long position.| FARO Technologies vs. MTI WIRELESS EDGE | FARO Technologies vs. Gol Intelligent Airlines | FARO Technologies vs. Gamma Communications plc | FARO Technologies vs. Spirent Communications plc |
| Chuangs China vs. Corporate Office Properties | Chuangs China vs. 24SEVENOFFICE GROUP AB | Chuangs China vs. MTI WIRELESS EDGE | Chuangs China vs. Tower One Wireless |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |