Correlation Between Flytech Technology and Asia Tech

Can any of the company-specific risk be diversified away by investing in both Flytech Technology and Asia Tech 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 Flytech Technology and Asia Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Flytech Technology Co and Asia Tech Image, you can compare the effects of market volatilities on Flytech Technology and Asia Tech 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 Flytech Technology with a short position of Asia Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flytech Technology and Asia Tech.

Diversification Opportunities for Flytech Technology and Asia Tech

0.31

Correlation Coefficient

Flytech Technology  Asia Tech

Weak diversification

The 3 months correlation between Flytech and Asia is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Flytech Technology Co and Asia Tech Image in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Tech Image and Flytech 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 Flytech Technology Co are associated (or correlated) with Asia Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Tech Image has no effect on the direction of Flytech Technology i.e., Flytech Technology and Asia Tech go up and down completely randomly.

Pair Corralation between Flytech Technology and Asia Tech

Assuming the 90 days trading horizon Flytech Technology is expected to generate 2.18 times less return on investment than Asia Tech. But when comparing it to its historical volatility, Flytech Technology Co is 1.17 times less risky than Asia Tech. It trades about 0.04 of its potential returns per unit of risk. Asia Tech Image is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  5,898  in Asia Tech Image on September 26, 2024 and sell it today you would earn a total of  4,652  from holding Asia Tech Image or generate 78.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.79%
Values	Daily Returns

Flytech Technology Co  vs.  Asia Tech Image

Flytech Technology

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Flytech Technology Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Flytech Technology is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Asia Tech Image

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asia Tech Image has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Asia Tech is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Flytech Technology and Asia Tech

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

The idea behind Flytech Technology Co and Asia Tech Image 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.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.