Correlation Between FUYO GENERAL and Continental Aktiengesellscha

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

By analyzing existing cross correlation between FUYO GENERAL LEASE and Continental Aktiengesellschaft, you can compare the effects of market volatilities on FUYO GENERAL and Continental Aktiengesellscha 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 FUYO GENERAL with a short position of Continental Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and Continental Aktiengesellscha.

Diversification Opportunities for FUYO GENERAL and Continental Aktiengesellscha

0.58

Correlation Coefficient

FUYO GENERAL  Continental Aktiengesellscha

Very weak diversification

The 3 months correlation between FUYO and Continental is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE and Continental Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Continental Aktiengesellscha and FUYO GENERAL 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 FUYO GENERAL LEASE are associated (or correlated) with Continental Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Continental Aktiengesellscha has no effect on the direction of FUYO GENERAL i.e., FUYO GENERAL and Continental Aktiengesellscha go up and down completely randomly.

Pair Corralation between FUYO GENERAL and Continental Aktiengesellscha

Assuming the 90 days horizon FUYO GENERAL LEASE is expected to generate 0.76 times more return on investment than Continental Aktiengesellscha. However, FUYO GENERAL LEASE is 1.32 times less risky than Continental Aktiengesellscha. It trades about 0.03 of its potential returns per unit of risk. Continental Aktiengesellschaft is currently generating about 0.01 per unit of risk. If you would invest  6,000  in FUYO GENERAL LEASE on October 5, 2024 and sell it today you would earn a total of  1,000.00  from holding FUYO GENERAL LEASE or generate 16.67% return on investment over 90 days.

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

FUYO GENERAL LEASE  vs.  Continental Aktiengesellschaft

FUYO GENERAL LEASE

Risk-Adjusted Performance

0 of 100

Weak

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

Continental Aktiengesellscha

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Continental Aktiengesellschaft has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively fragile basic indicators, Continental Aktiengesellscha unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FUYO GENERAL and Continental Aktiengesellscha

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

The idea behind FUYO GENERAL LEASE and Continental Aktiengesellschaft 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 Commodity Directory module to find actively traded commodities issued by global exchanges.