Correlation Between Skardin Industrial and Feng Ching

Can any of the company-specific risk be diversified away by investing in both Skardin Industrial and Feng Ching 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 Skardin Industrial and Feng Ching into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Skardin Industrial and Feng Ching Metal, you can compare the effects of market volatilities on Skardin Industrial and Feng Ching 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 Skardin Industrial with a short position of Feng Ching. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skardin Industrial and Feng Ching.

Diversification Opportunities for Skardin Industrial and Feng Ching

-0.08

Correlation Coefficient

Skardin Industrial  Feng Ching

Good diversification

The 3 months correlation between Skardin and Feng is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Skardin Industrial and Feng Ching Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Feng Ching Metal and Skardin Industrial 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 Skardin Industrial are associated (or correlated) with Feng Ching. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Feng Ching Metal has no effect on the direction of Skardin Industrial i.e., Skardin Industrial and Feng Ching go up and down completely randomly.

Pair Corralation between Skardin Industrial and Feng Ching

Assuming the 90 days trading horizon Skardin Industrial is expected to generate 2.12 times more return on investment than Feng Ching. However, Skardin Industrial is 2.12 times more volatile than Feng Ching Metal. It trades about 0.04 of its potential returns per unit of risk. Feng Ching Metal is currently generating about -0.14 per unit of risk. If you would invest  6,360  in Skardin Industrial on September 8, 2024 and sell it today you would earn a total of  260.00  from holding Skardin Industrial or generate 4.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Skardin Industrial  vs.  Feng Ching Metal

Skardin Industrial

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Skardin Industrial are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Skardin Industrial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Feng Ching Metal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Feng Ching Metal has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Skardin Industrial and Feng Ching

The main advantage of trading using opposite Skardin Industrial and Feng Ching positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skardin Industrial position performs unexpectedly, Feng Ching 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 Feng Ching will offset losses from the drop in Feng Ching's long position.

The idea behind Skardin Industrial and Feng Ching Metal pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.