Correlation Between FUYO GENERAL and China BlueChemical
Can any of the company-specific risk be diversified away by investing in both FUYO GENERAL and China BlueChemical 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 China BlueChemical 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 China BlueChemical, you can compare the effects of market volatilities on FUYO GENERAL and China BlueChemical 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 China BlueChemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and China BlueChemical.
Diversification Opportunities for FUYO GENERAL and China BlueChemical
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FUYO and China is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE and China BlueChemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China BlueChemical 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 China BlueChemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China BlueChemical has no effect on the direction of FUYO GENERAL i.e., FUYO GENERAL and China BlueChemical go up and down completely randomly.
Pair Corralation between FUYO GENERAL and China BlueChemical
Assuming the 90 days horizon FUYO GENERAL is expected to generate 2.68 times less return on investment than China BlueChemical. But when comparing it to its historical volatility, FUYO GENERAL LEASE is 2.27 times less risky than China BlueChemical. It trades about 0.01 of its potential returns per unit of risk. China BlueChemical is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 24.00 in China BlueChemical on September 5, 2024 and sell it today you would lose (1.00) from holding China BlueChemical or give up 4.17% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
FUYO GENERAL LEASE vs. China BlueChemical
Performance |
Timeline |
FUYO GENERAL LEASE |
China BlueChemical |
FUYO GENERAL and China BlueChemical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FUYO GENERAL and China BlueChemical
The main advantage of trading using opposite FUYO GENERAL and China BlueChemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUYO GENERAL position performs unexpectedly, China BlueChemical 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 China BlueChemical will offset losses from the drop in China BlueChemical's long position.FUYO GENERAL vs. Texas Roadhouse | FUYO GENERAL vs. Take Two Interactive Software | FUYO GENERAL vs. PSI Software AG | FUYO GENERAL vs. Magic Software Enterprises |
China BlueChemical vs. FUYO GENERAL LEASE | China BlueChemical vs. Global Ship Lease | China BlueChemical vs. PLAYSTUDIOS A DL 0001 | China BlueChemical vs. Lendlease Group |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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