Correlation Between Alexander Marine and Fulgent Sun
Can any of the company-specific risk be diversified away by investing in both Alexander Marine and Fulgent Sun 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 Fulgent Sun 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 Fulgent Sun International, you can compare the effects of market volatilities on Alexander Marine and Fulgent Sun 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 Fulgent Sun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alexander Marine and Fulgent Sun.
Diversification Opportunities for Alexander Marine and Fulgent Sun
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alexander and Fulgent is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Alexander Marine Co and Fulgent Sun International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fulgent Sun International 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 Fulgent Sun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fulgent Sun International has no effect on the direction of Alexander Marine i.e., Alexander Marine and Fulgent Sun go up and down completely randomly.
Pair Corralation between Alexander Marine and Fulgent Sun
Assuming the 90 days trading horizon Alexander Marine Co is expected to under-perform the Fulgent Sun. In addition to that, Alexander Marine is 1.11 times more volatile than Fulgent Sun International. It trades about -0.15 of its total potential returns per unit of risk. Fulgent Sun International is currently generating about -0.04 per unit of volatility. If you would invest 12,600 in Fulgent Sun International on September 1, 2024 and sell it today you would lose (1,400) from holding Fulgent Sun International or give up 11.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
Alexander Marine Co vs. Fulgent Sun International
Performance |
| Timeline |
| Alexander Marine |
| Fulgent Sun International |
Alexander Marine and Fulgent Sun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alexander Marine and Fulgent Sun
The main advantage of trading using opposite Alexander Marine and Fulgent Sun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alexander Marine position performs unexpectedly, Fulgent Sun 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 Fulgent Sun will offset losses from the drop in Fulgent Sun's long position.| Alexander Marine vs. Giant Manufacturing Co | Alexander Marine vs. Merida Industry Co | Alexander Marine vs. Johnson Health Tech | Alexander Marine vs. Power Wind Health |
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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 Directory module to find actively traded commodities issued by global exchanges.
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