Correlation Between TRI CHEMICAL and FUYO GENERAL
Can any of the company-specific risk be diversified away by investing in both TRI CHEMICAL and FUYO GENERAL 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 TRI CHEMICAL and FUYO GENERAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRI CHEMICAL LABORATINC and FUYO GENERAL LEASE, you can compare the effects of market volatilities on TRI CHEMICAL and FUYO GENERAL 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 TRI CHEMICAL with a short position of FUYO GENERAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRI CHEMICAL and FUYO GENERAL.
Diversification Opportunities for TRI CHEMICAL and FUYO GENERAL
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TRI and FUYO is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding TRI CHEMICAL LABORATINC and FUYO GENERAL LEASE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUYO GENERAL LEASE and TRI CHEMICAL 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 TRI CHEMICAL LABORATINC are associated (or correlated) with FUYO GENERAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUYO GENERAL LEASE has no effect on the direction of TRI CHEMICAL i.e., TRI CHEMICAL and FUYO GENERAL go up and down completely randomly.
Pair Corralation between TRI CHEMICAL and FUYO GENERAL
Assuming the 90 days horizon TRI CHEMICAL LABORATINC is expected to generate 2.77 times more return on investment than FUYO GENERAL. However, TRI CHEMICAL is 2.77 times more volatile than FUYO GENERAL LEASE. It trades about 0.27 of its potential returns per unit of risk. FUYO GENERAL LEASE is currently generating about -0.03 per unit of risk. If you would invest 1,740 in TRI CHEMICAL LABORATINC on October 14, 2024 and sell it today you would earn a total of 280.00 from holding TRI CHEMICAL LABORATINC or generate 16.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TRI CHEMICAL LABORATINC vs. FUYO GENERAL LEASE
Performance |
| Timeline |
| TRI CHEMICAL LABORATINC |
| FUYO GENERAL LEASE |
TRI CHEMICAL and FUYO GENERAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRI CHEMICAL and FUYO GENERAL
The main advantage of trading using opposite TRI CHEMICAL and FUYO GENERAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRI CHEMICAL position performs unexpectedly, FUYO GENERAL 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 FUYO GENERAL will offset losses from the drop in FUYO GENERAL's long position.| TRI CHEMICAL vs. Compugroup Medical SE | TRI CHEMICAL vs. ENVVENO MEDICAL DL 00001 | TRI CHEMICAL vs. CARDINAL HEALTH | TRI CHEMICAL vs. Wenzhou Kangning Hospital |
| FUYO GENERAL vs. TRI CHEMICAL LABORATINC | FUYO GENERAL vs. New Residential Investment | FUYO GENERAL vs. Japan Asia Investment | FUYO GENERAL vs. Keck Seng Investments |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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