Correlation Between Fuyao Glass and LKQ
Can any of the company-specific risk be diversified away by investing in both Fuyao Glass and LKQ 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 LKQ 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 LKQ Corporation, you can compare the effects of market volatilities on Fuyao Glass and LKQ 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 LKQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuyao Glass and LKQ.
Diversification Opportunities for Fuyao Glass and LKQ
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fuyao and LKQ is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Fuyao Glass Industry and LKQ Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LKQ Corporation 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 LKQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LKQ Corporation has no effect on the direction of Fuyao Glass i.e., Fuyao Glass and LKQ go up and down completely randomly.
Pair Corralation between Fuyao Glass and LKQ
Assuming the 90 days horizon Fuyao Glass Industry is expected to generate 1.33 times more return on investment than LKQ. However, Fuyao Glass is 1.33 times more volatile than LKQ Corporation. It trades about 0.16 of its potential returns per unit of risk. LKQ Corporation is currently generating about 0.02 per unit of risk. If you would invest 482.00 in Fuyao Glass Industry on August 27, 2024 and sell it today you would earn a total of 158.00 from holding Fuyao Glass Industry or generate 32.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fuyao Glass Industry vs. LKQ Corp.
Performance |
| Timeline |
| Fuyao Glass Industry |
| LKQ Corporation |
Fuyao Glass and LKQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuyao Glass and LKQ
The main advantage of trading using opposite Fuyao Glass and LKQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuyao Glass position performs unexpectedly, LKQ 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 LKQ will offset losses from the drop in LKQ's long position.| Fuyao Glass vs. Superior Plus Corp | Fuyao Glass vs. NMI Holdings | Fuyao Glass vs. Origin Agritech | Fuyao Glass vs. SIVERS SEMICONDUCTORS AB |
| LKQ vs. Superior Plus Corp | LKQ vs. NMI Holdings | LKQ vs. Origin Agritech | LKQ vs. SIVERS SEMICONDUCTORS AB |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |