Correlation Between Alexander Marine and Fusheng Precision
Can any of the company-specific risk be diversified away by investing in both Alexander Marine 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 Alexander Marine and Fusheng Precision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alexander Marine Co and Fusheng Precision Co, you can compare the effects of market volatilities on Alexander Marine 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 Alexander Marine with a short position of Fusheng Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alexander Marine and Fusheng Precision.
Diversification Opportunities for Alexander Marine and Fusheng Precision
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alexander and Fusheng is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Alexander Marine 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 Alexander Marine 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 Alexander Marine 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 Alexander Marine i.e., Alexander Marine and Fusheng Precision go up and down completely randomly.
Pair Corralation between Alexander Marine and Fusheng Precision
Assuming the 90 days trading horizon Alexander Marine Co is expected to under-perform the Fusheng Precision. In addition to that, Alexander Marine is 1.23 times more volatile than Fusheng Precision Co. It trades about -0.06 of its total potential returns per unit of risk. Fusheng Precision Co is currently generating about 0.09 per unit of volatility. If you would invest 20,050 in Fusheng Precision Co on August 29, 2024 and sell it today you would earn a total of 10,550 from holding Fusheng Precision Co or generate 52.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alexander Marine Co vs. Fusheng Precision Co
Performance |
| Timeline |
| Alexander Marine |
| Fusheng Precision |
Alexander Marine and Fusheng Precision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alexander Marine and Fusheng Precision
The main advantage of trading using opposite Alexander Marine and Fusheng Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alexander Marine 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.| Alexander Marine vs. Chung Hsin Electric Machinery | Alexander Marine vs. Andes Technology Corp | Alexander Marine vs. Asia Vital Components | Alexander Marine vs. Fulgent Sun International |
| Fusheng Precision vs. Feng Tay Enterprises | Fusheng Precision vs. Ruentex Materials Co | Fusheng Precision vs. Symtek Automation Asia | Fusheng Precision vs. CTCI Corp |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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