Correlation Between SBA Communications and FUYO GENERAL
Can any of the company-specific risk be diversified away by investing in both SBA Communications and FUYO GENERAL 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 SBA Communications and FUYO GENERAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBA Communications Corp and FUYO GENERAL LEASE, you can compare the effects of market volatilities on SBA Communications and FUYO GENERAL 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 SBA Communications with a short position of FUYO GENERAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBA Communications and FUYO GENERAL.
Diversification Opportunities for SBA Communications and FUYO GENERAL
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SBA and FUYO is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding SBA Communications Corp and FUYO GENERAL LEASE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUYO GENERAL LEASE and SBA Communications 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 SBA Communications Corp are associated (or correlated) with FUYO GENERAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUYO GENERAL LEASE has no effect on the direction of SBA Communications i.e., SBA Communications and FUYO GENERAL go up and down completely randomly.
Pair Corralation between SBA Communications and FUYO GENERAL
Assuming the 90 days horizon SBA Communications Corp is expected to under-perform the FUYO GENERAL. In addition to that, SBA Communications is 1.14 times more volatile than FUYO GENERAL LEASE. It trades about 0.0 of its total potential returns per unit of risk. FUYO GENERAL LEASE is currently generating about 0.03 per unit of volatility. If you would invest 6,150 in FUYO GENERAL LEASE on December 12, 2024 and sell it today you would earn a total of 1,050 from holding FUYO GENERAL LEASE or generate 17.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
SBA Communications Corp vs. FUYO GENERAL LEASE
Performance |
| Timeline |
| SBA Communications Corp |
| FUYO GENERAL LEASE |
SBA Communications and FUYO GENERAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBA Communications and FUYO GENERAL
The main advantage of trading using opposite SBA Communications and FUYO GENERAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBA Communications position performs unexpectedly, FUYO GENERAL 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 FUYO GENERAL will offset losses from the drop in FUYO GENERAL's long position.| SBA Communications vs. SAFEROADS HLDGS | ||
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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