Correlation Between Canadian Utilities and FUYO GENERAL
Can any of the company-specific risk be diversified away by investing in both Canadian Utilities and FUYO GENERAL 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 Canadian Utilities and FUYO GENERAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian Utilities Limited and FUYO GENERAL LEASE, you can compare the effects of market volatilities on Canadian Utilities and FUYO GENERAL 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 Canadian Utilities with a short position of FUYO GENERAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Utilities and FUYO GENERAL.
Diversification Opportunities for Canadian Utilities and FUYO GENERAL
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Canadian and FUYO is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Utilities Limited and FUYO GENERAL LEASE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUYO GENERAL LEASE and Canadian Utilities 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 Canadian Utilities Limited are associated (or correlated) with FUYO GENERAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUYO GENERAL LEASE has no effect on the direction of Canadian Utilities i.e., Canadian Utilities and FUYO GENERAL go up and down completely randomly.
Pair Corralation between Canadian Utilities and FUYO GENERAL
Assuming the 90 days horizon Canadian Utilities is expected to generate 1.42 times less return on investment than FUYO GENERAL. But when comparing it to its historical volatility, Canadian Utilities Limited is 1.25 times less risky than FUYO GENERAL. It trades about 0.02 of its potential returns per unit of risk. FUYO GENERAL LEASE is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 5,900 in FUYO GENERAL LEASE on August 24, 2024 and sell it today you would earn a total of 750.00 from holding FUYO GENERAL LEASE or generate 12.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Utilities Limited vs. FUYO GENERAL LEASE
Performance |
| Timeline |
| Canadian Utilities |
| FUYO GENERAL LEASE |
Canadian Utilities and FUYO GENERAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Utilities and FUYO GENERAL
The main advantage of trading using opposite Canadian Utilities and FUYO GENERAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Utilities position performs unexpectedly, FUYO GENERAL 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 FUYO GENERAL will offset losses from the drop in FUYO GENERAL's long position.| Canadian Utilities vs. Sempra | Canadian Utilities vs. Superior Plus Corp | Canadian Utilities vs. NMI Holdings | Canadian Utilities vs. Origin Agritech |
| FUYO GENERAL vs. United Rentals | FUYO GENERAL vs. WillScot Mobile Mini | FUYO GENERAL vs. Superior Plus Corp | FUYO GENERAL vs. NMI Holdings |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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