Correlation Between Fuyao Glass and Stanley Electric
Can any of the company-specific risk be diversified away by investing in both Fuyao Glass and Stanley Electric 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 Stanley Electric 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 Stanley Electric Co, you can compare the effects of market volatilities on Fuyao Glass and Stanley Electric 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 Stanley Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuyao Glass and Stanley Electric.
Diversification Opportunities for Fuyao Glass and Stanley Electric
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fuyao and Stanley is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Fuyao Glass Industry and Stanley Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stanley Electric 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 Stanley Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stanley Electric has no effect on the direction of Fuyao Glass i.e., Fuyao Glass and Stanley Electric go up and down completely randomly.
Pair Corralation between Fuyao Glass and Stanley Electric
Assuming the 90 days horizon Fuyao Glass Industry is expected to under-perform the Stanley Electric. In addition to that, Fuyao Glass is 2.27 times more volatile than Stanley Electric Co. It trades about -0.01 of its total potential returns per unit of risk. Stanley Electric Co is currently generating about 0.04 per unit of volatility. If you would invest 1,560 in Stanley Electric Co on November 3, 2024 and sell it today you would earn a total of 10.00 from holding Stanley Electric Co or generate 0.64% 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. Stanley Electric Co
Performance |
| Timeline |
| Fuyao Glass Industry |
| Stanley Electric |
Fuyao Glass and Stanley Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuyao Glass and Stanley Electric
The main advantage of trading using opposite Fuyao Glass and Stanley Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuyao Glass position performs unexpectedly, Stanley Electric 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 Stanley Electric will offset losses from the drop in Stanley Electric's long position.| Fuyao Glass vs. Fuyao Glass Industry | Fuyao Glass vs. Anheuser Busch InBev SANV | Fuyao Glass vs. AALBERTS IND | Fuyao Glass vs. SECURITAS B |
| Stanley Electric vs. Darden Restaurants | Stanley Electric vs. Acadia Healthcare | Stanley Electric vs. ETFS Coffee ETC | Stanley Electric vs. Linedata Services SA |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| CEOs Directory Screen CEOs from public companies around the world |