Correlation Between Edible Garden and Fuyao Glass
Can any of the company-specific risk be diversified away by investing in both Edible Garden and Fuyao Glass 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 Edible Garden and Fuyao Glass into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edible Garden AG and Fuyao Glass Industry, you can compare the effects of market volatilities on Edible Garden and Fuyao Glass 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 Edible Garden with a short position of Fuyao Glass. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edible Garden and Fuyao Glass.
Diversification Opportunities for Edible Garden and Fuyao Glass
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Edible and Fuyao is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Edible Garden AG and Fuyao Glass Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuyao Glass Industry and Edible Garden 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 Edible Garden AG are associated (or correlated) with Fuyao Glass. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuyao Glass Industry has no effect on the direction of Edible Garden i.e., Edible Garden and Fuyao Glass go up and down completely randomly.
Pair Corralation between Edible Garden and Fuyao Glass
Given the investment horizon of 90 days Edible Garden AG is expected to under-perform the Fuyao Glass. In addition to that, Edible Garden is 2.21 times more volatile than Fuyao Glass Industry. It trades about -0.07 of its total potential returns per unit of risk. Fuyao Glass Industry is currently generating about 0.03 per unit of volatility. If you would invest 151.00 in Fuyao Glass Industry on October 21, 2024 and sell it today you would earn a total of 16.00 from holding Fuyao Glass Industry or generate 10.6% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 98.97% |
Values | Daily Returns |
Edible Garden AG vs. Fuyao Glass Industry
Performance |
Timeline |
Edible Garden AG |
Fuyao Glass Industry |
Edible Garden and Fuyao Glass Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Edible Garden and Fuyao Glass
The main advantage of trading using opposite Edible Garden and Fuyao Glass positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edible Garden position performs unexpectedly, Fuyao Glass 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 Fuyao Glass will offset losses from the drop in Fuyao Glass' long position.Edible Garden vs. Golden Agri Resources | Edible Garden vs. Vital Farms | Edible Garden vs. Local Bounti Corp | Edible Garden vs. Fresh Del Monte |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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