Correlation Between FUYO GENERAL and International Business

Can any of the company-specific risk be diversified away by investing in both FUYO GENERAL and International Business 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 International Business 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 International Business Machines, you can compare the effects of market volatilities on FUYO GENERAL and International Business 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 International Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and International Business.

Diversification Opportunities for FUYO GENERAL and International Business

0.71

Correlation Coefficient

FUYO GENERAL  International Business

Poor diversification

The 3 months correlation between FUYO and International is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business 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 International Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Business has no effect on the direction of FUYO GENERAL i.e., FUYO GENERAL and International Business go up and down completely randomly.

Pair Corralation between FUYO GENERAL and International Business

Assuming the 90 days horizon FUYO GENERAL is expected to generate 1.34 times less return on investment than International Business. In addition to that, FUYO GENERAL is 1.0 times more volatile than International Business Machines. It trades about 0.15 of its total potential returns per unit of risk. International Business Machines is currently generating about 0.2 per unit of volatility. If you would invest  19,409  in International Business Machines on October 7, 2024 and sell it today you would earn a total of  1,991  from holding International Business Machines or generate 10.26% return on investment over 90 days.

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

FUYO GENERAL LEASE  vs.  International Business Machine

FUYO GENERAL LEASE

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FUYO GENERAL LEASE are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, FUYO GENERAL may actually be approaching a critical reversion point that can send shares even higher in February 2025.

International Business

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in International Business Machines are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, International Business is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with FUYO GENERAL and International Business

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

The idea behind FUYO GENERAL LEASE and International Business Machines 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.