Correlation Between Fuyao Glass and DENSO P
Can any of the company-specific risk be diversified away by investing in both Fuyao Glass and DENSO P 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 DENSO P 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 DENSO P ADR, you can compare the effects of market volatilities on Fuyao Glass and DENSO P 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 DENSO P. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuyao Glass and DENSO P.
Diversification Opportunities for Fuyao Glass and DENSO P
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fuyao and DENSO is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Fuyao Glass Industry and DENSO P ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DENSO P ADR 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 DENSO P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DENSO P ADR has no effect on the direction of Fuyao Glass i.e., Fuyao Glass and DENSO P go up and down completely randomly.
Pair Corralation between Fuyao Glass and DENSO P
Assuming the 90 days horizon Fuyao Glass Industry is expected to generate 1.73 times more return on investment than DENSO P. However, Fuyao Glass is 1.73 times more volatile than DENSO P ADR. It trades about 0.09 of its potential returns per unit of risk. DENSO P ADR is currently generating about 0.02 per unit of risk. If you would invest 172.00 in Fuyao Glass Industry on September 23, 2024 and sell it today you would earn a total of 483.00 from holding Fuyao Glass Industry or generate 280.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fuyao Glass Industry vs. DENSO P ADR
Performance |
| Timeline |
| Fuyao Glass Industry |
| DENSO P ADR |
Fuyao Glass and DENSO P Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuyao Glass and DENSO P
The main advantage of trading using opposite Fuyao Glass and DENSO P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuyao Glass position performs unexpectedly, DENSO P 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 DENSO P will offset losses from the drop in DENSO P's long position.| Fuyao Glass vs. Dno ASA | Fuyao Glass vs. DENSO P ADR | Fuyao Glass vs. Aptiv PLC | Fuyao Glass vs. PT Astra International |
| DENSO P vs. Dno ASA | DENSO P vs. Aptiv PLC | DENSO P vs. PT Astra International | DENSO P vs. Magna International |
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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