Correlation Between FUYO GENERAL and Plexus Corp

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

Diversification Opportunities for FUYO GENERAL and Plexus Corp

0.73

Correlation Coefficient

FUYO GENERAL  Plexus Corp

Poor diversification

The 3 months correlation between FUYO and Plexus is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE and Plexus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plexus Corp 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 Plexus Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plexus Corp has no effect on the direction of FUYO GENERAL i.e., FUYO GENERAL and Plexus Corp go up and down completely randomly.

Pair Corralation between FUYO GENERAL and Plexus Corp

Assuming the 90 days horizon FUYO GENERAL LEASE is expected to generate 0.47 times more return on investment than Plexus Corp. However, FUYO GENERAL LEASE is 2.14 times less risky than Plexus Corp. It trades about -0.24 of its potential returns per unit of risk. Plexus Corp is currently generating about -0.12 per unit of risk. If you would invest  7,100  in FUYO GENERAL LEASE on October 27, 2024 and sell it today you would lose (350.00) from holding FUYO GENERAL LEASE or give up 4.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.0%
Values	Daily Returns

FUYO GENERAL LEASE  vs.  Plexus Corp

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 stable basic indicators, FUYO GENERAL is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Plexus Corp

Risk-Adjusted Performance

6 of 100

Modest

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

Pair Trading with FUYO GENERAL and Plexus Corp

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

The idea behind FUYO GENERAL LEASE and Plexus Corp 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.