Correlation Between Fuyao Glass and Ioneer

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

By analyzing existing cross correlation between Fuyao Glass Industry and ioneer Ltd American, you can compare the effects of market volatilities on Fuyao Glass and Ioneer 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 Fuyao Glass with a short position of Ioneer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuyao Glass and Ioneer.

Diversification Opportunities for Fuyao Glass and Ioneer

-0.71

Correlation Coefficient

Fuyao Glass  Ioneer

Pay attention - limited upside

The 3 months correlation between Fuyao and Ioneer is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Fuyao Glass Industry and ioneer Ltd American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ioneer American and Fuyao Glass 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 Fuyao Glass Industry are associated (or correlated) with Ioneer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ioneer American has no effect on the direction of Fuyao Glass i.e., Fuyao Glass and Ioneer go up and down completely randomly.

Pair Corralation between Fuyao Glass and Ioneer

Assuming the 90 days horizon Fuyao Glass Industry is expected to generate 0.62 times more return on investment than Ioneer. However, Fuyao Glass Industry is 1.6 times less risky than Ioneer. It trades about 0.14 of its potential returns per unit of risk. ioneer Ltd American is currently generating about -0.12 per unit of risk. If you would invest  129.00  in Fuyao Glass Industry on October 24, 2024 and sell it today you would earn a total of  38.00  from holding Fuyao Glass Industry or generate 29.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	92.19%
Values	Daily Returns

Fuyao Glass Industry  vs.  ioneer Ltd American

Fuyao Glass Industry

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fuyao Glass Industry are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, Fuyao Glass showed solid returns over the last few months and may actually be approaching a breakup point.

ioneer American

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ioneer Ltd American has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Fuyao Glass and Ioneer

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

The idea behind Fuyao Glass Industry and ioneer Ltd American 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.