Correlation Between FUYO GENERAL and Food Life
Can any of the company-specific risk be diversified away by investing in both FUYO GENERAL and Food Life 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 FUYO GENERAL and Food Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FUYO GENERAL LEASE and Food Life Companies, you can compare the effects of market volatilities on FUYO GENERAL and Food Life 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 FUYO GENERAL with a short position of Food Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and Food Life.
Diversification Opportunities for FUYO GENERAL and Food Life
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FUYO and Food is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE and Food Life Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Food Life Companies and FUYO GENERAL 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 FUYO GENERAL LEASE are associated (or correlated) with Food Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Food Life Companies has no effect on the direction of FUYO GENERAL i.e., FUYO GENERAL and Food Life go up and down completely randomly.
Pair Corralation between FUYO GENERAL and Food Life
Assuming the 90 days horizon FUYO GENERAL LEASE is expected to under-perform the Food Life. But the stock apears to be less risky and, when comparing its historical volatility, FUYO GENERAL LEASE is 1.45 times less risky than Food Life. The stock trades about -0.06 of its potential returns per unit of risk. The Food Life Companies is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,800 in Food Life Companies on August 27, 2024 and sell it today you would earn a total of 140.00 from holding Food Life Companies or generate 7.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FUYO GENERAL LEASE vs. Food Life Companies
Performance |
| Timeline |
| FUYO GENERAL LEASE |
| Food Life Companies |
FUYO GENERAL and Food Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUYO GENERAL and Food Life
The main advantage of trading using opposite FUYO GENERAL and Food Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUYO GENERAL position performs unexpectedly, Food Life 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 Food Life will offset losses from the drop in Food Life's long position.| FUYO GENERAL vs. Compugroup Medical SE | FUYO GENERAL vs. MeVis Medical Solutions | FUYO GENERAL vs. Advanced Medical Solutions | FUYO GENERAL vs. Japan Medical Dynamic |
| Food Life vs. Take Two Interactive Software | Food Life vs. Universal Display | Food Life vs. SIMS METAL MGT | Food Life vs. Unity Software |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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