Correlation Between Fukuyama Transporting and China Resources
Can any of the company-specific risk be diversified away by investing in both Fukuyama Transporting and China Resources 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 Fukuyama Transporting and China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fukuyama Transporting Co and China Resources Land, you can compare the effects of market volatilities on Fukuyama Transporting and China Resources 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 Fukuyama Transporting with a short position of China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fukuyama Transporting and China Resources.
Diversification Opportunities for Fukuyama Transporting and China Resources
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fukuyama and China is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Fukuyama Transporting Co and China Resources Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Land and Fukuyama Transporting 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 Fukuyama Transporting Co are associated (or correlated) with China Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Land has no effect on the direction of Fukuyama Transporting i.e., Fukuyama Transporting and China Resources go up and down completely randomly.
Pair Corralation between Fukuyama Transporting and China Resources
Assuming the 90 days horizon Fukuyama Transporting Co is expected to generate 0.54 times more return on investment than China Resources. However, Fukuyama Transporting Co is 1.84 times less risky than China Resources. It trades about -0.31 of its potential returns per unit of risk. China Resources Land is currently generating about -0.34 per unit of risk. If you would invest 2,300 in Fukuyama Transporting Co on October 13, 2024 and sell it today you would lose (100.00) from holding Fukuyama Transporting Co or give up 4.35% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 94.44% |
Values | Daily Returns |
Fukuyama Transporting Co vs. China Resources Land
Performance |
Timeline |
Fukuyama Transporting |
China Resources Land |
Fukuyama Transporting and China Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fukuyama Transporting and China Resources
The main advantage of trading using opposite Fukuyama Transporting and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fukuyama Transporting position performs unexpectedly, China Resources 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 China Resources will offset losses from the drop in China Resources' long position.Fukuyama Transporting vs. Virtus Investment Partners | Fukuyama Transporting vs. Cal Maine Foods | Fukuyama Transporting vs. MEDCAW INVESTMENTS LS 01 | Fukuyama Transporting vs. Gladstone Investment |
China Resources vs. STRAYER EDUCATION | China Resources vs. G8 EDUCATION | China Resources vs. United Insurance Holdings | China Resources vs. Insurance Australia Group |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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