Correlation Between FUYO GENERAL and POSBO UNSPADRS/20YC1
Can any of the company-specific risk be diversified away by investing in both FUYO GENERAL and POSBO UNSPADRS/20YC1 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 POSBO UNSPADRS/20YC1 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 POSBO UNSPADRS20YC1, you can compare the effects of market volatilities on FUYO GENERAL and POSBO UNSPADRS/20YC1 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 POSBO UNSPADRS/20YC1. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and POSBO UNSPADRS/20YC1.
Diversification Opportunities for FUYO GENERAL and POSBO UNSPADRS/20YC1
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FUYO and POSBO is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE and POSBO UNSPADRS20YC1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POSBO UNSPADRS/20YC1 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 POSBO UNSPADRS/20YC1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POSBO UNSPADRS/20YC1 has no effect on the direction of FUYO GENERAL i.e., FUYO GENERAL and POSBO UNSPADRS/20YC1 go up and down completely randomly.
Pair Corralation between FUYO GENERAL and POSBO UNSPADRS/20YC1
Assuming the 90 days horizon FUYO GENERAL LEASE is expected to generate 1.09 times more return on investment than POSBO UNSPADRS/20YC1. However, FUYO GENERAL is 1.09 times more volatile than POSBO UNSPADRS20YC1. It trades about 0.26 of its potential returns per unit of risk. POSBO UNSPADRS20YC1 is currently generating about 0.01 per unit of risk. If you would invest 6,450 in FUYO GENERAL LEASE on September 1, 2024 and sell it today you would earn a total of 500.00 from holding FUYO GENERAL LEASE or generate 7.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
FUYO GENERAL LEASE vs. POSBO UNSPADRS20YC1
Performance |
| Timeline |
| FUYO GENERAL LEASE |
| POSBO UNSPADRS/20YC1 |
FUYO GENERAL and POSBO UNSPADRS/20YC1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUYO GENERAL and POSBO UNSPADRS/20YC1
The main advantage of trading using opposite FUYO GENERAL and POSBO UNSPADRS/20YC1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUYO GENERAL position performs unexpectedly, POSBO UNSPADRS/20YC1 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 POSBO UNSPADRS/20YC1 will offset losses from the drop in POSBO UNSPADRS/20YC1's long position.| FUYO GENERAL vs. United Rentals | FUYO GENERAL vs. Superior Plus Corp | FUYO GENERAL vs. NMI Holdings | FUYO GENERAL vs. Origin Agritech |
| POSBO UNSPADRS/20YC1 vs. Check Point Software | POSBO UNSPADRS/20YC1 vs. MAGIC SOFTWARE ENTR | POSBO UNSPADRS/20YC1 vs. FUYO GENERAL LEASE | POSBO UNSPADRS/20YC1 vs. FANDIFI TECHNOLOGY P |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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