Correlation Between Coxon Precise and Fu Burg

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

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

Diversification Opportunities for Coxon Precise and Fu Burg

-0.58

Correlation Coefficient

Coxon Precise  Fu Burg

Excellent diversification

The 3 months correlation between Coxon and 8929 is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Coxon Precise Industrial 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 Coxon Precise 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 Coxon Precise Industrial 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 Coxon Precise i.e., Coxon Precise and Fu Burg go up and down completely randomly.

Pair Corralation between Coxon Precise and Fu Burg

Assuming the 90 days trading horizon Coxon Precise Industrial is expected to generate 1.1 times more return on investment than Fu Burg. However, Coxon Precise is 1.1 times more volatile than Fu Burg Industrial. It trades about 0.05 of its potential returns per unit of risk. Fu Burg Industrial is currently generating about 0.04 per unit of risk. If you would invest  1,190  in Coxon Precise Industrial on September 24, 2024 and sell it today you would earn a total of  700.00  from holding Coxon Precise Industrial or generate 58.82% return on investment over 90 days.

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

Coxon Precise Industrial  vs.  Fu Burg Industrial

Coxon Precise Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Coxon Precise Industrial 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.

Fu Burg Industrial

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fu Burg Industrial are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Fu Burg showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Coxon Precise and Fu Burg

The main advantage of trading using opposite Coxon Precise and Fu Burg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coxon Precise 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 Coxon Precise Industrial 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.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.