Correlation Between Foxconn Technology and I Jang
Can any of the company-specific risk be diversified away by investing in both Foxconn Technology and I Jang 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 Foxconn Technology and I Jang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Foxconn Technology Co and I Jang Industrial, you can compare the effects of market volatilities on Foxconn Technology and I Jang 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 Foxconn Technology with a short position of I Jang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foxconn Technology and I Jang.
Diversification Opportunities for Foxconn Technology and I Jang
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Foxconn and 8342 is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Foxconn Technology Co and I Jang Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on I Jang Industrial and Foxconn Technology 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 Foxconn Technology Co are associated (or correlated) with I Jang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of I Jang Industrial has no effect on the direction of Foxconn Technology i.e., Foxconn Technology and I Jang go up and down completely randomly.
Pair Corralation between Foxconn Technology and I Jang
Assuming the 90 days trading horizon Foxconn Technology Co is expected to generate 3.02 times more return on investment than I Jang. However, Foxconn Technology is 3.02 times more volatile than I Jang Industrial. It trades about 0.09 of its potential returns per unit of risk. I Jang Industrial is currently generating about -0.03 per unit of risk. If you would invest 6,640 in Foxconn Technology Co on September 25, 2024 and sell it today you would earn a total of 1,100 from holding Foxconn Technology Co or generate 16.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Foxconn Technology Co vs. I Jang Industrial
Performance |
Timeline |
Foxconn Technology |
I Jang Industrial |
Foxconn Technology and I Jang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Foxconn Technology and I Jang
The main advantage of trading using opposite Foxconn Technology and I Jang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foxconn Technology position performs unexpectedly, I Jang 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 I Jang will offset losses from the drop in I Jang's long position.Foxconn Technology vs. Century Wind Power | Foxconn Technology vs. Green World Fintech | Foxconn Technology vs. Ingentec | Foxconn Technology vs. Chaheng Precision Co |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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