Correlation Between FUYO GENERAL and INTERSHOP Communications

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

Diversification Opportunities for FUYO GENERAL and INTERSHOP Communications

-0.38

Correlation Coefficient

FUYO GENERAL  INTERSHOP Communications

Very good diversification

The 3 months correlation between FUYO and INTERSHOP is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE and INTERSHOP Communications Aktie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTERSHOP Communications 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 INTERSHOP Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTERSHOP Communications has no effect on the direction of FUYO GENERAL i.e., FUYO GENERAL and INTERSHOP Communications go up and down completely randomly.

Pair Corralation between FUYO GENERAL and INTERSHOP Communications

Assuming the 90 days horizon FUYO GENERAL LEASE is expected to under-perform the INTERSHOP Communications. But the stock apears to be less risky and, when comparing its historical volatility, FUYO GENERAL LEASE is 1.84 times less risky than INTERSHOP Communications. The stock trades about 0.0 of its potential returns per unit of risk. The INTERSHOP Communications Aktiengesellschaft is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  179.00  in INTERSHOP Communications Aktiengesellschaft on August 31, 2024 and sell it today you would earn a total of  14.00  from holding INTERSHOP Communications Aktiengesellschaft or generate 7.82% return on investment over 90 days.

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

FUYO GENERAL LEASE  vs.  INTERSHOP Communications Aktie

FUYO GENERAL LEASE

Risk-Adjusted Performance

0 of 100

Very 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.

INTERSHOP Communications

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in INTERSHOP Communications Aktiengesellschaft are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, INTERSHOP Communications may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with FUYO GENERAL and INTERSHOP Communications

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

The idea behind FUYO GENERAL LEASE and INTERSHOP Communications 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.