Correlation Between Fosun International and Global Tech
Can any of the company-specific risk be diversified away by investing in both Fosun International and Global Tech 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 Fosun International and Global Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fosun International and Global Tech Industries, you can compare the effects of market volatilities on Fosun International and Global Tech 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 Fosun International with a short position of Global Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fosun International and Global Tech.
Diversification Opportunities for Fosun International and Global Tech
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fosun and Global is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Fosun International and Global Tech Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Tech Industries and Fosun International 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 Fosun International are associated (or correlated) with Global Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Tech Industries has no effect on the direction of Fosun International i.e., Fosun International and Global Tech go up and down completely randomly.
Pair Corralation between Fosun International and Global Tech
Assuming the 90 days horizon Fosun International is expected to generate 198.68 times less return on investment than Global Tech. But when comparing it to its historical volatility, Fosun International is 11.39 times less risky than Global Tech. It trades about 0.01 of its potential returns per unit of risk. Global Tech Industries is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 86.00 in Global Tech Industries on September 2, 2024 and sell it today you would lose (82.99) from holding Global Tech Industries or give up 96.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 47.85% |
| Values | Daily Returns |
Fosun International vs. Global Tech Industries
Performance |
| Timeline |
| Fosun International |
| Global Tech Industries |
Fosun International and Global Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fosun International and Global Tech
The main advantage of trading using opposite Fosun International and Global Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fosun International position performs unexpectedly, Global Tech 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 Global Tech will offset losses from the drop in Global Tech's long position.| Fosun International vs. Global Tech Industries | Fosun International vs. NN Inc | Fosun International vs. National Health Scan | Fosun International vs. RCABS Inc |
| Global Tech vs. Seychelle Environmtl | Global Tech vs. Energy and Water | Global Tech vs. One World Universe | Global Tech vs. Vow ASA |
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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