Correlation Between Fusheng Precision and Chi Hua
Can any of the company-specific risk be diversified away by investing in both Fusheng Precision and Chi Hua 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 Fusheng Precision and Chi Hua into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fusheng Precision Co and Chi Hua Fitness, you can compare the effects of market volatilities on Fusheng Precision and Chi Hua 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 Fusheng Precision with a short position of Chi Hua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fusheng Precision and Chi Hua.
Diversification Opportunities for Fusheng Precision and Chi Hua
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fusheng and Chi is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Fusheng Precision Co and Chi Hua Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chi Hua Fitness and Fusheng Precision 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 Fusheng Precision Co are associated (or correlated) with Chi Hua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chi Hua Fitness has no effect on the direction of Fusheng Precision i.e., Fusheng Precision and Chi Hua go up and down completely randomly.
Pair Corralation between Fusheng Precision and Chi Hua
Assuming the 90 days trading horizon Fusheng Precision Co is expected to generate 1.49 times more return on investment than Chi Hua. However, Fusheng Precision is 1.49 times more volatile than Chi Hua Fitness. It trades about 0.1 of its potential returns per unit of risk. Chi Hua Fitness is currently generating about -0.11 per unit of risk. If you would invest 21,950 in Fusheng Precision Co on September 1, 2024 and sell it today you would earn a total of 9,250 from holding Fusheng Precision Co or generate 42.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.47% |
| Values | Daily Returns |
Fusheng Precision Co vs. Chi Hua Fitness
Performance |
| Timeline |
| Fusheng Precision |
| Chi Hua Fitness |
Fusheng Precision and Chi Hua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fusheng Precision and Chi Hua
The main advantage of trading using opposite Fusheng Precision and Chi Hua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fusheng Precision position performs unexpectedly, Chi Hua 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 Chi Hua will offset losses from the drop in Chi Hua's long position.| Fusheng Precision vs. Giant Manufacturing Co | Fusheng Precision vs. Merida Industry Co | Fusheng Precision vs. Johnson Health Tech | Fusheng Precision vs. Power Wind Health |
| Chi Hua vs. Giant Manufacturing Co | Chi Hua vs. Merida Industry Co | Chi Hua vs. Johnson Health Tech | Chi Hua 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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