Correlation Between Chailease Holding and Fu Burg

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

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

Diversification Opportunities for Chailease Holding and Fu Burg

-0.32

Correlation Coefficient

Chailease Holding  Fu Burg

Very good diversification

The 3 months correlation between Chailease and 8929 is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Chailease Holding Co 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 Chailease Holding 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 Chailease Holding Co 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 Chailease Holding i.e., Chailease Holding and Fu Burg go up and down completely randomly.

Pair Corralation between Chailease Holding and Fu Burg

Assuming the 90 days trading horizon Chailease Holding Co is expected to generate 0.77 times more return on investment than Fu Burg. However, Chailease Holding Co is 1.29 times less risky than Fu Burg. It trades about 0.06 of its potential returns per unit of risk. Fu Burg Industrial is currently generating about -0.07 per unit of risk. If you would invest  11,500  in Chailease Holding Co on December 29, 2024 and sell it today you would earn a total of  650.00  from holding Chailease Holding Co or generate 5.65% return on investment over 90 days.

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

Chailease Holding Co  vs.  Fu Burg Industrial

Chailease Holding

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Chailease Holding Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Chailease Holding may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Fu Burg Industrial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fu Burg Industrial 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.

Pair Trading with Chailease Holding and Fu Burg

The main advantage of trading using opposite Chailease Holding and Fu Burg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chailease Holding 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 Chailease Holding Co 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.