Correlation Between FUYO GENERAL and Eaton PLC
Can any of the company-specific risk be diversified away by investing in both FUYO GENERAL and Eaton PLC 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 Eaton PLC 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 Eaton PLC, you can compare the effects of market volatilities on FUYO GENERAL and Eaton PLC 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 Eaton PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and Eaton PLC.
Diversification Opportunities for FUYO GENERAL and Eaton PLC
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FUYO and Eaton is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE and Eaton PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton PLC 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 Eaton PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton PLC has no effect on the direction of FUYO GENERAL i.e., FUYO GENERAL and Eaton PLC go up and down completely randomly.
Pair Corralation between FUYO GENERAL and Eaton PLC
Assuming the 90 days horizon FUYO GENERAL LEASE is expected to under-perform the Eaton PLC. But the stock apears to be less risky and, when comparing its historical volatility, FUYO GENERAL LEASE is 1.45 times less risky than Eaton PLC. The stock trades about -0.04 of its potential returns per unit of risk. The Eaton PLC is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 24,726 in Eaton PLC on November 3, 2024 and sell it today you would earn a total of 5,889 from holding Eaton PLC or generate 23.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FUYO GENERAL LEASE vs. Eaton PLC
Performance |
| Timeline |
| FUYO GENERAL LEASE |
| Eaton PLC |
FUYO GENERAL and Eaton PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUYO GENERAL and Eaton PLC
The main advantage of trading using opposite FUYO GENERAL and Eaton PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUYO GENERAL position performs unexpectedly, Eaton PLC 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 Eaton PLC will offset losses from the drop in Eaton PLC's long position.| FUYO GENERAL vs. SANOK RUBBER ZY | FUYO GENERAL vs. MOVIE GAMES SA | FUYO GENERAL vs. Summit Materials | FUYO GENERAL vs. UNIVERSAL MUSIC GROUP |
| Eaton PLC vs. RCI Hospitality Holdings | Eaton PLC vs. MPH Health Care | Eaton PLC vs. WESANA HEALTH HOLD | Eaton PLC vs. Sims Metal Management |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |