Correlation Between Century Wind and Fortune Information
Can any of the company-specific risk be diversified away by investing in both Century Wind and Fortune Information 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 Century Wind and Fortune Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Wind Power and Fortune Information Systems, you can compare the effects of market volatilities on Century Wind and Fortune Information 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 Century Wind with a short position of Fortune Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Wind and Fortune Information.
Diversification Opportunities for Century Wind and Fortune Information
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Century and Fortune is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Century Wind Power and Fortune Information Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortune Information and Century Wind 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 Century Wind Power are associated (or correlated) with Fortune Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortune Information has no effect on the direction of Century Wind i.e., Century Wind and Fortune Information go up and down completely randomly.
Pair Corralation between Century Wind and Fortune Information
Assuming the 90 days trading horizon Century Wind Power is expected to under-perform the Fortune Information. But the stock apears to be less risky and, when comparing its historical volatility, Century Wind Power is 1.16 times less risky than Fortune Information. The stock trades about -0.11 of its potential returns per unit of risk. The Fortune Information Systems is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,695 in Fortune Information Systems on September 24, 2024 and sell it today you would earn a total of 75.00 from holding Fortune Information Systems or generate 2.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Century Wind Power vs. Fortune Information Systems
Performance |
Timeline |
Century Wind Power |
Fortune Information |
Century Wind and Fortune Information Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Century Wind and Fortune Information
The main advantage of trading using opposite Century Wind and Fortune Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Wind position performs unexpectedly, Fortune Information 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 Fortune Information will offset losses from the drop in Fortune Information's long position.Century Wind vs. Ruentex Development Co | Century Wind vs. United Integrated Services | Century Wind vs. CTCI Corp | Century Wind vs. Continental Holdings Corp |
Fortune Information vs. Century Wind Power | Fortune Information vs. Green World Fintech | Fortune Information vs. Ingentec | Fortune Information vs. Chaheng Precision Co |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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