Correlation Between Fuyao Glass and AUSTEVOLL SEAFOOD
Can any of the company-specific risk be diversified away by investing in both Fuyao Glass and AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD, you can compare the effects of market volatilities on Fuyao Glass and AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuyao Glass and AUSTEVOLL SEAFOOD.
Diversification Opportunities for Fuyao Glass and AUSTEVOLL SEAFOOD
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fuyao and AUSTEVOLL is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Fuyao Glass Industry and AUSTEVOLL SEAFOOD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUSTEVOLL SEAFOOD has no effect on the direction of Fuyao Glass i.e., Fuyao Glass and AUSTEVOLL SEAFOOD go up and down completely randomly.
Pair Corralation between Fuyao Glass and AUSTEVOLL SEAFOOD
Assuming the 90 days horizon Fuyao Glass Industry is expected to generate 1.57 times more return on investment than AUSTEVOLL SEAFOOD. However, Fuyao Glass is 1.57 times more volatile than AUSTEVOLL SEAFOOD. It trades about 0.14 of its potential returns per unit of risk. AUSTEVOLL SEAFOOD is currently generating about 0.08 per unit of risk. If you would invest 550.00 in Fuyao Glass Industry on September 14, 2024 and sell it today you would earn a total of 110.00 from holding Fuyao Glass Industry or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
Fuyao Glass Industry vs. AUSTEVOLL SEAFOOD
Performance |
| Timeline |
| Fuyao Glass Industry |
| AUSTEVOLL SEAFOOD |
Fuyao Glass and AUSTEVOLL SEAFOOD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuyao Glass and AUSTEVOLL SEAFOOD
The main advantage of trading using opposite Fuyao Glass and AUSTEVOLL SEAFOOD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuyao Glass position performs unexpectedly, AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD will offset losses from the drop in AUSTEVOLL SEAFOOD's long position.| Fuyao Glass vs. AUSTEVOLL SEAFOOD | Fuyao Glass vs. EAGLE MATERIALS | Fuyao Glass vs. Compagnie Plastic Omnium | Fuyao Glass vs. Rayonier Advanced Materials |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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