Correlation Between General Plastic and Fulin Plastic
Can any of the company-specific risk be diversified away by investing in both General Plastic and Fulin Plastic 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 General Plastic and Fulin Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Plastic Industrial and Fulin Plastic Industry, you can compare the effects of market volatilities on General Plastic and Fulin Plastic 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 General Plastic with a short position of Fulin Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Plastic and Fulin Plastic.
Diversification Opportunities for General Plastic and Fulin Plastic
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between General and Fulin is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding General Plastic Industrial and Fulin Plastic Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fulin Plastic Industry and General Plastic 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 General Plastic Industrial are associated (or correlated) with Fulin Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fulin Plastic Industry has no effect on the direction of General Plastic i.e., General Plastic and Fulin Plastic go up and down completely randomly.
Pair Corralation between General Plastic and Fulin Plastic
Assuming the 90 days trading horizon General Plastic Industrial is expected to under-perform the Fulin Plastic. In addition to that, General Plastic is 1.14 times more volatile than Fulin Plastic Industry. It trades about -0.2 of its total potential returns per unit of risk. Fulin Plastic Industry is currently generating about -0.04 per unit of volatility. If you would invest 6,770 in Fulin Plastic Industry on September 4, 2024 and sell it today you would lose (40.00) from holding Fulin Plastic Industry or give up 0.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Plastic Industrial vs. Fulin Plastic Industry
Performance |
| Timeline |
| General Plastic Indu |
| Fulin Plastic Industry |
General Plastic and Fulin Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Plastic and Fulin Plastic
The main advantage of trading using opposite General Plastic and Fulin Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Plastic position performs unexpectedly, Fulin Plastic 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 Fulin Plastic will offset losses from the drop in Fulin Plastic's long position.| General Plastic vs. Universal Microelectronics Co | General Plastic vs. AVerMedia Technologies | General Plastic vs. Symtek Automation Asia | General Plastic vs. WiseChip Semiconductor |
| Fulin Plastic vs. Far Eastern New | Fulin Plastic vs. Eclat Textile Co | Fulin Plastic vs. Ruentex Industries | Fulin Plastic vs. Formosa Taffeta Co |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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