Correlation Between Fuyao Glass and Aptiv PLC
Can any of the company-specific risk be diversified away by investing in both Fuyao Glass and Aptiv PLC 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 Aptiv PLC 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 Aptiv PLC, you can compare the effects of market volatilities on Fuyao Glass and Aptiv PLC 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 Aptiv PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuyao Glass and Aptiv PLC.
Diversification Opportunities for Fuyao Glass and Aptiv PLC
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fuyao and Aptiv is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Fuyao Glass Industry and Aptiv PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptiv PLC 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 Aptiv PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptiv PLC has no effect on the direction of Fuyao Glass i.e., Fuyao Glass and Aptiv PLC go up and down completely randomly.
Pair Corralation between Fuyao Glass and Aptiv PLC
Assuming the 90 days horizon Fuyao Glass Industry is expected to generate 0.36 times more return on investment than Aptiv PLC. However, Fuyao Glass Industry is 2.77 times less risky than Aptiv PLC. It trades about -0.09 of its potential returns per unit of risk. Aptiv PLC is currently generating about -0.18 per unit of risk. If you would invest 650.00 in Fuyao Glass Industry on August 31, 2024 and sell it today you would lose (20.00) from holding Fuyao Glass Industry or give up 3.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fuyao Glass Industry vs. Aptiv PLC
Performance |
| Timeline |
| Fuyao Glass Industry |
| Aptiv PLC |
Fuyao Glass and Aptiv PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuyao Glass and Aptiv PLC
The main advantage of trading using opposite Fuyao Glass and Aptiv PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuyao Glass position performs unexpectedly, Aptiv PLC 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 Aptiv PLC will offset losses from the drop in Aptiv PLC's long position.| Fuyao Glass vs. BANKINTER ADR 2007 | Fuyao Glass vs. Charter Communications | Fuyao Glass vs. Gamma Communications plc | Fuyao Glass vs. Regions Financial |
| Aptiv PLC vs. PT Astra International | Aptiv PLC vs. Magna International | Aptiv PLC vs. Fuyao Glass Industry | Aptiv PLC vs. Superior Plus 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |