Correlation Between FDG Electric and Fanhua

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

By analyzing existing cross correlation between FDG Electric Vehicles and Fanhua Inc, you can compare the effects of market volatilities on FDG Electric and Fanhua 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 FDG Electric with a short position of Fanhua. Check out your portfolio center. Please also check ongoing floating volatility patterns of FDG Electric and Fanhua.

Diversification Opportunities for FDG Electric and Fanhua

0.0

Correlation Coefficient

FDG Electric  Fanhua

Pay attention - limited upside

The 3 months correlation between FDG and Fanhua is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FDG Electric Vehicles and Fanhua Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fanhua Inc and FDG Electric 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 FDG Electric Vehicles are associated (or correlated) with Fanhua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fanhua Inc has no effect on the direction of FDG Electric i.e., FDG Electric and Fanhua go up and down completely randomly.

Pair Corralation between FDG Electric and Fanhua

If you would invest  0.01  in FDG Electric Vehicles on October 3, 2024 and sell it today you would earn a total of  0.00  from holding FDG Electric Vehicles or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.26%
Values	Daily Returns

FDG Electric Vehicles  vs.  Fanhua Inc

FDG Electric Vehicles

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FDG Electric Vehicles has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, FDG Electric is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Fanhua Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fanhua Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with FDG Electric and Fanhua

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

The idea behind FDG Electric Vehicles and Fanhua Inc 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.