Correlation Between FibroGen and FedEx
Can any of the company-specific risk be diversified away by investing in both FibroGen and FedEx 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 FibroGen and FedEx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FibroGen and FedEx, you can compare the effects of market volatilities on FibroGen and FedEx 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 FibroGen with a short position of FedEx. Check out your portfolio center. Please also check ongoing floating volatility patterns of FibroGen and FedEx.
Diversification Opportunities for FibroGen and FedEx
Average diversification
The 3 months correlation between FibroGen and FedEx is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding FibroGen and FedEx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FedEx and FibroGen 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 FibroGen are associated (or correlated) with FedEx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FedEx has no effect on the direction of FibroGen i.e., FibroGen and FedEx go up and down completely randomly.
Pair Corralation between FibroGen and FedEx
Assuming the 90 days trading horizon FibroGen is expected to under-perform the FedEx. In addition to that, FibroGen is 2.89 times more volatile than FedEx. It trades about -0.06 of its total potential returns per unit of risk. FedEx is currently generating about 0.12 per unit of volatility. If you would invest 435,228 in FedEx on September 1, 2024 and sell it today you would earn a total of 181,722 from holding FedEx or generate 41.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FibroGen vs. FedEx
Performance |
| Timeline |
| FibroGen |
| FedEx |
FibroGen and FedEx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FibroGen and FedEx
The main advantage of trading using opposite FibroGen and FedEx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FibroGen position performs unexpectedly, FedEx 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 FedEx will offset losses from the drop in FedEx's long position.| FibroGen vs. Deutsche Bank Aktiengesellschaft | FibroGen vs. Genworth Financial | FibroGen vs. Verizon Communications | FibroGen vs. Grupo Sports World |
| FedEx vs. Genworth Financial | FedEx vs. Grupo Sports World | FedEx vs. Capital One Financial | FedEx vs. Monster Beverage 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 CEOs Directory module to screen CEOs from public companies around the world.
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