Correlation Between Canlan Ice and Fuyao Glass
Can any of the company-specific risk be diversified away by investing in both Canlan Ice and Fuyao Glass 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 Canlan Ice and Fuyao Glass into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canlan Ice Sports and Fuyao Glass Industry, you can compare the effects of market volatilities on Canlan Ice and Fuyao Glass 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 Canlan Ice with a short position of Fuyao Glass. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canlan Ice and Fuyao Glass.
Diversification Opportunities for Canlan Ice and Fuyao Glass
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Canlan and Fuyao is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports and Fuyao Glass Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuyao Glass Industry and Canlan Ice 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 Canlan Ice Sports are associated (or correlated) with Fuyao Glass. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuyao Glass Industry has no effect on the direction of Canlan Ice i.e., Canlan Ice and Fuyao Glass go up and down completely randomly.
Pair Corralation between Canlan Ice and Fuyao Glass
Assuming the 90 days horizon Canlan Ice is expected to generate 18.29 times less return on investment than Fuyao Glass. But when comparing it to its historical volatility, Canlan Ice Sports is 36.29 times less risky than Fuyao Glass. It trades about 0.13 of its potential returns per unit of risk. Fuyao Glass Industry is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 54.00 in Fuyao Glass Industry on October 9, 2024 and sell it today you would earn a total of 113.00 from holding Fuyao Glass Industry or generate 209.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Canlan Ice Sports vs. Fuyao Glass Industry
Performance |
| Timeline |
| Canlan Ice Sports |
| Fuyao Glass Industry |
Canlan Ice and Fuyao Glass Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canlan Ice and Fuyao Glass
The main advantage of trading using opposite Canlan Ice and Fuyao Glass positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canlan Ice position performs unexpectedly, Fuyao Glass 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 Fuyao Glass will offset losses from the drop in Fuyao Glass' long position.| Canlan Ice vs. Marfrig Global Foods | Canlan Ice vs. Eldorado Gold Corp | Canlan Ice vs. Tyson Foods | Canlan Ice vs. Kellanova |
| Fuyao Glass vs. Barrick Gold Corp | Fuyao Glass vs. ioneer Ltd American | Fuyao Glass vs. National Vision Holdings | Fuyao Glass vs. BW Offshore Limited |
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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