Correlation Between FUYO GENERAL and Kinder Morgan
Can any of the company-specific risk be diversified away by investing in both FUYO GENERAL and Kinder Morgan 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 Kinder Morgan 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 Kinder Morgan, you can compare the effects of market volatilities on FUYO GENERAL and Kinder Morgan 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 Kinder Morgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and Kinder Morgan.
Diversification Opportunities for FUYO GENERAL and Kinder Morgan
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between FUYO and Kinder is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE and Kinder Morgan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinder Morgan 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 Kinder Morgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinder Morgan has no effect on the direction of FUYO GENERAL i.e., FUYO GENERAL and Kinder Morgan go up and down completely randomly.
Pair Corralation between FUYO GENERAL and Kinder Morgan
Assuming the 90 days horizon FUYO GENERAL LEASE is expected to generate 0.99 times more return on investment than Kinder Morgan. However, FUYO GENERAL LEASE is 1.01 times less risky than Kinder Morgan. It trades about 0.08 of its potential returns per unit of risk. Kinder Morgan is currently generating about 0.02 per unit of risk. If you would invest 6,750 in FUYO GENERAL LEASE on September 13, 2024 and sell it today you would earn a total of 150.00 from holding FUYO GENERAL LEASE or generate 2.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FUYO GENERAL LEASE vs. Kinder Morgan
Performance |
| Timeline |
| FUYO GENERAL LEASE |
| Kinder Morgan |
FUYO GENERAL and Kinder Morgan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUYO GENERAL and Kinder Morgan
The main advantage of trading using opposite FUYO GENERAL and Kinder Morgan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUYO GENERAL position performs unexpectedly, Kinder Morgan 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 Kinder Morgan will offset losses from the drop in Kinder Morgan's long position.| FUYO GENERAL vs. United Rentals | FUYO GENERAL vs. WillScot Mobile Mini | FUYO GENERAL vs. Superior Plus Corp | FUYO GENERAL vs. SIVERS SEMICONDUCTORS AB |
| Kinder Morgan vs. TC Energy | Kinder Morgan vs. Pembina Pipeline Corp | Kinder Morgan vs. Superior Plus Corp | Kinder Morgan vs. SIVERS SEMICONDUCTORS AB |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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