Correlation Between Sunfon Construction and Fusheng Precision
Can any of the company-specific risk be diversified away by investing in both Sunfon Construction and Fusheng Precision 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 Sunfon Construction and Fusheng Precision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunfon Construction Co and Fusheng Precision Co, you can compare the effects of market volatilities on Sunfon Construction and Fusheng Precision 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 Sunfon Construction with a short position of Fusheng Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunfon Construction and Fusheng Precision.
Diversification Opportunities for Sunfon Construction and Fusheng Precision
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sunfon and Fusheng is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sunfon Construction Co and Fusheng Precision Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fusheng Precision and Sunfon Construction 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 Sunfon Construction Co are associated (or correlated) with Fusheng Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fusheng Precision has no effect on the direction of Sunfon Construction i.e., Sunfon Construction and Fusheng Precision go up and down completely randomly.
Pair Corralation between Sunfon Construction and Fusheng Precision
Assuming the 90 days trading horizon Sunfon Construction Co is expected to under-perform the Fusheng Precision. But the stock apears to be less risky and, when comparing its historical volatility, Sunfon Construction Co is 1.57 times less risky than Fusheng Precision. The stock trades about -0.09 of its potential returns per unit of risk. The Fusheng Precision Co is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 29,750 in Fusheng Precision Co on September 1, 2024 and sell it today you would earn a total of 1,450 from holding Fusheng Precision Co or generate 4.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sunfon Construction Co vs. Fusheng Precision Co
Performance |
| Timeline |
| Sunfon Construction |
| Fusheng Precision |
Sunfon Construction and Fusheng Precision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunfon Construction and Fusheng Precision
The main advantage of trading using opposite Sunfon Construction and Fusheng Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunfon Construction position performs unexpectedly, Fusheng Precision 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 Fusheng Precision will offset losses from the drop in Fusheng Precision's long position.| Sunfon Construction vs. United Radiant Technology | Sunfon Construction vs. Microtips Technology | Sunfon Construction vs. Dadi Early Childhood Education | Sunfon Construction vs. China Times Publishing |
| Fusheng Precision vs. Giant Manufacturing Co | Fusheng Precision vs. Merida Industry Co | Fusheng Precision vs. Johnson Health Tech | Fusheng Precision vs. Power Wind Health |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |