Correlation Between Fwusow Industry and Great Wall
Can any of the company-specific risk be diversified away by investing in both Fwusow Industry and Great Wall 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 Fwusow Industry and Great Wall into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fwusow Industry Co and Great Wall Enterprise, you can compare the effects of market volatilities on Fwusow Industry and Great Wall 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 Fwusow Industry with a short position of Great Wall. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fwusow Industry and Great Wall.
Diversification Opportunities for Fwusow Industry and Great Wall
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fwusow and Great is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Fwusow Industry Co and Great Wall Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Wall Enterprise and Fwusow Industry 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 Fwusow Industry Co are associated (or correlated) with Great Wall. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Wall Enterprise has no effect on the direction of Fwusow Industry i.e., Fwusow Industry and Great Wall go up and down completely randomly.
Pair Corralation between Fwusow Industry and Great Wall
Assuming the 90 days trading horizon Fwusow Industry Co is expected to under-perform the Great Wall. But the stock apears to be less risky and, when comparing its historical volatility, Fwusow Industry Co is 1.28 times less risky than Great Wall. The stock trades about -0.25 of its potential returns per unit of risk. The Great Wall Enterprise is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 5,120 in Great Wall Enterprise on September 14, 2024 and sell it today you would earn a total of 190.00 from holding Great Wall Enterprise or generate 3.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fwusow Industry Co vs. Great Wall Enterprise
Performance |
| Timeline |
| Fwusow Industry |
| Great Wall Enterprise |
Fwusow Industry and Great Wall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fwusow Industry and Great Wall
The main advantage of trading using opposite Fwusow Industry and Great Wall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fwusow Industry position performs unexpectedly, Great Wall 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 Great Wall will offset losses from the drop in Great Wall's long position.| Fwusow Industry vs. Great Wall Enterprise | Fwusow Industry vs. Charoen Pokphand Enterprise | Fwusow Industry vs. Taisun Enterprise Co | Fwusow Industry vs. Lian Hwa Foods |
| Great Wall vs. Charoen Pokphand Enterprise | Great Wall vs. Uni President Enterprises Corp | Great Wall vs. Lien Hwa Industrial | Great Wall vs. Standard Foods Corp |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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