Correlation Between FARO Technologies and Sino Land
Can any of the company-specific risk be diversified away by investing in both FARO Technologies and Sino Land 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 Sino Land into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FARO Technologies and Sino Land, you can compare the effects of market volatilities on FARO Technologies and Sino Land 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 Sino Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of FARO Technologies and Sino Land.
Diversification Opportunities for FARO Technologies and Sino Land
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FARO and Sino is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding FARO Technologies and Sino Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sino Land 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 Sino Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sino Land has no effect on the direction of FARO Technologies i.e., FARO Technologies and Sino Land go up and down completely randomly.
Pair Corralation between FARO Technologies and Sino Land
Assuming the 90 days horizon FARO Technologies is expected to generate 5.95 times more return on investment than Sino Land. However, FARO Technologies is 5.95 times more volatile than Sino Land. It trades about 0.29 of its potential returns per unit of risk. Sino Land is currently generating about 0.04 per unit of risk. If you would invest 1,610 in FARO Technologies on September 3, 2024 and sell it today you would earn a total of 870.00 from holding FARO Technologies or generate 54.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FARO Technologies vs. Sino Land
Performance |
| Timeline |
| FARO Technologies |
| Sino Land |
FARO Technologies and Sino Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FARO Technologies and Sino Land
The main advantage of trading using opposite FARO Technologies and Sino Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FARO Technologies position performs unexpectedly, Sino Land 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 Sino Land will offset losses from the drop in Sino Land's long position.| FARO Technologies vs. BE Semiconductor Industries | FARO Technologies vs. Zijin Mining Group | FARO Technologies vs. Perseus Mining Limited | FARO Technologies vs. Magnachip Semiconductor |
| Sino Land vs. United Utilities Group | Sino Land vs. Chesapeake Utilities | Sino Land vs. PKSHA TECHNOLOGY INC | Sino Land vs. FARO Technologies |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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