Correlation Between Fu Burg and Central Reinsurance
Can any of the company-specific risk be diversified away by investing in both Fu Burg and Central Reinsurance 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 Fu Burg and Central Reinsurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fu Burg Industrial and Central Reinsurance Corp, you can compare the effects of market volatilities on Fu Burg and Central Reinsurance 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 Fu Burg with a short position of Central Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fu Burg and Central Reinsurance.
Diversification Opportunities for Fu Burg and Central Reinsurance
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 8929 and Central is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Fu Burg Industrial and Central Reinsurance Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Reinsurance Corp and Fu Burg 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 Fu Burg Industrial are associated (or correlated) with Central Reinsurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Reinsurance Corp has no effect on the direction of Fu Burg i.e., Fu Burg and Central Reinsurance go up and down completely randomly.
Pair Corralation between Fu Burg and Central Reinsurance
Assuming the 90 days trading horizon Fu Burg Industrial is expected to generate 1.67 times more return on investment than Central Reinsurance. However, Fu Burg is 1.67 times more volatile than Central Reinsurance Corp. It trades about 0.06 of its potential returns per unit of risk. Central Reinsurance Corp is currently generating about 0.07 per unit of risk. If you would invest 2,025 in Fu Burg Industrial on September 3, 2024 and sell it today you would earn a total of 1,370 from holding Fu Burg Industrial or generate 67.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fu Burg Industrial vs. Central Reinsurance Corp
Performance |
| Timeline |
| Fu Burg Industrial |
| Central Reinsurance Corp |
Fu Burg and Central Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fu Burg and Central Reinsurance
The main advantage of trading using opposite Fu Burg and Central Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fu Burg position performs unexpectedly, Central Reinsurance 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 Central Reinsurance will offset losses from the drop in Central Reinsurance's long position.| Fu Burg vs. Ruentex Development Co | Fu Burg vs. Symtek Automation Asia | Fu Burg vs. CTCI Corp | Fu Burg vs. Information Technology Total |
| Central Reinsurance vs. Huaku Development Co | Central Reinsurance vs. Chailease Holding Co | Central Reinsurance vs. CTBC Financial Holding |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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