Correlation Between Fulgent Sun and Andes Technology

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

By analyzing existing cross correlation between Fulgent Sun International and Andes Technology Corp, you can compare the effects of market volatilities on Fulgent Sun and Andes Technology 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 Fulgent Sun with a short position of Andes Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fulgent Sun and Andes Technology.

Diversification Opportunities for Fulgent Sun and Andes Technology

-0.24

Correlation Coefficient

Fulgent Sun  Andes Technology

Very good diversification

The 3 months correlation between Fulgent and Andes is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Fulgent Sun International and Andes Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Andes Technology Corp and Fulgent Sun 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 Fulgent Sun International are associated (or correlated) with Andes Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Andes Technology Corp has no effect on the direction of Fulgent Sun i.e., Fulgent Sun and Andes Technology go up and down completely randomly.

Pair Corralation between Fulgent Sun and Andes Technology

Assuming the 90 days trading horizon Fulgent Sun is expected to generate 114.38 times less return on investment than Andes Technology. In addition to that, Fulgent Sun is 1.09 times more volatile than Andes Technology Corp. It trades about 0.0 of its total potential returns per unit of risk. Andes Technology Corp is currently generating about 0.13 per unit of volatility. If you would invest  33,700  in Andes Technology Corp on September 18, 2024 and sell it today you would earn a total of  6,300  from holding Andes Technology Corp or generate 18.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Fulgent Sun International  vs.  Andes Technology Corp

Fulgent Sun International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Andes Technology Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Andes Technology Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Andes Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fulgent Sun and Andes Technology

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

The idea behind Fulgent Sun International and Andes Technology Corp 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.