Correlation Between Fuchs Petrolub and H B

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

By analyzing existing cross correlation between Fuchs Petrolub SE and H B Fuller, you can compare the effects of market volatilities on Fuchs Petrolub and H B 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 Fuchs Petrolub with a short position of H B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuchs Petrolub and H B.

Diversification Opportunities for Fuchs Petrolub and H B

-0.55

Correlation Coefficient

Fuchs Petrolub  H B

Excellent diversification

The 3 months correlation between Fuchs and FUL is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Fuchs Petrolub SE and H B Fuller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H B Fuller and Fuchs Petrolub 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 Fuchs Petrolub SE are associated (or correlated) with H B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H B Fuller has no effect on the direction of Fuchs Petrolub i.e., Fuchs Petrolub and H B go up and down completely randomly.

Pair Corralation between Fuchs Petrolub and H B

Assuming the 90 days horizon Fuchs Petrolub SE is expected to generate 1.02 times more return on investment than H B. However, Fuchs Petrolub is 1.02 times more volatile than H B Fuller. It trades about 0.07 of its potential returns per unit of risk. H B Fuller is currently generating about -0.08 per unit of risk. If you would invest  1,051  in Fuchs Petrolub SE on August 31, 2024 and sell it today you would earn a total of  63.00  from holding Fuchs Petrolub SE or generate 5.99% return on investment over 90 days.

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

Fuchs Petrolub SE  vs.  H B Fuller

Fuchs Petrolub SE

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fuchs Petrolub SE are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental drivers, Fuchs Petrolub may actually be approaching a critical reversion point that can send shares even higher in December 2024.

H B Fuller

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days H B Fuller has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Fuchs Petrolub and H B

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

The idea behind Fuchs Petrolub SE and H B Fuller 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.