Correlation Between China Bills and Far Eastern
Can any of the company-specific risk be diversified away by investing in both China Bills and Far Eastern 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 Bills and Far Eastern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Bills Finance and Far Eastern New, you can compare the effects of market volatilities on China Bills and Far Eastern 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 Bills with a short position of Far Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Bills and Far Eastern.
Diversification Opportunities for China Bills and Far Eastern
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and Far is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Bills Finance and Far Eastern New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Far Eastern New and China Bills 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 Bills Finance are associated (or correlated) with Far Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Far Eastern New has no effect on the direction of China Bills i.e., China Bills and Far Eastern go up and down completely randomly.
Pair Corralation between China Bills and Far Eastern
If you would invest 3,165 in Far Eastern New on February 23, 2024 and sell it today you would earn a total of 225.00 from holding Far Eastern New or generate 7.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
China Bills Finance vs. Far Eastern New
Performance |
Timeline |
China Bills Finance |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Far Eastern New |
China Bills and Far Eastern Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Bills and Far Eastern
The main advantage of trading using opposite China Bills and Far Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Bills position performs unexpectedly, Far Eastern 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 Far Eastern will offset losses from the drop in Far Eastern's long position.China Bills vs. Chang Hwa Commercial | China Bills vs. IBF Financial Holdings | China Bills vs. Taiwan Business Bank | China Bills vs. Yuanta Financial Holdings |
Far Eastern vs. Nan Ya Plastics | Far Eastern vs. Taiwan Cement Corp | Far Eastern vs. Formosa Plastics Corp | Far Eastern vs. Asia Cement 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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