Correlation Between Promise Technology and Fu Burg

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

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

Diversification Opportunities for Promise Technology and Fu Burg

-0.51

Correlation Coefficient

Promise Technology  Fu Burg

Excellent diversification

The 3 months correlation between Promise and 8929 is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Promise Technology and Fu Burg Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fu Burg Industrial and Promise 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 Promise Technology are associated (or correlated) with Fu Burg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fu Burg Industrial has no effect on the direction of Promise Technology i.e., Promise Technology and Fu Burg go up and down completely randomly.

Pair Corralation between Promise Technology and Fu Burg

Assuming the 90 days trading horizon Promise Technology is expected to generate 1.25 times less return on investment than Fu Burg. In addition to that, Promise Technology is 1.11 times more volatile than Fu Burg Industrial. It trades about 0.02 of its total potential returns per unit of risk. Fu Burg Industrial is currently generating about 0.03 per unit of volatility. If you would invest  2,055  in Fu Burg Industrial on September 26, 2024 and sell it today you would earn a total of  530.00  from holding Fu Burg Industrial or generate 25.79% return on investment over 90 days.

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

Promise Technology  vs.  Fu Burg Industrial

Promise Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Promise Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Fu Burg Industrial

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fu Burg Industrial are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Fu Burg may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Promise Technology and Fu Burg

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

The idea behind Promise Technology and Fu Burg Industrial 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.