Correlation Between FUYO GENERAL and Sibanye Stillwater
Can any of the company-specific risk be diversified away by investing in both FUYO GENERAL and Sibanye Stillwater 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 Sibanye Stillwater 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 Sibanye Stillwater Limited, you can compare the effects of market volatilities on FUYO GENERAL and Sibanye Stillwater 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 Sibanye Stillwater. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and Sibanye Stillwater.
Diversification Opportunities for FUYO GENERAL and Sibanye Stillwater
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FUYO and Sibanye is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE and Sibanye Stillwater Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sibanye Stillwater 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 Sibanye Stillwater. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sibanye Stillwater has no effect on the direction of FUYO GENERAL i.e., FUYO GENERAL and Sibanye Stillwater go up and down completely randomly.
Pair Corralation between FUYO GENERAL and Sibanye Stillwater
Assuming the 90 days horizon FUYO GENERAL LEASE is expected to generate 0.36 times more return on investment than Sibanye Stillwater. However, FUYO GENERAL LEASE is 2.8 times less risky than Sibanye Stillwater. It trades about 0.26 of its potential returns per unit of risk. Sibanye Stillwater Limited is currently generating about -0.13 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FUYO GENERAL LEASE vs. Sibanye Stillwater Limited
Performance |
| Timeline |
| FUYO GENERAL LEASE |
| Sibanye Stillwater |
FUYO GENERAL and Sibanye Stillwater Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUYO GENERAL and Sibanye Stillwater
The main advantage of trading using opposite FUYO GENERAL and Sibanye Stillwater positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUYO GENERAL position performs unexpectedly, Sibanye Stillwater 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 Sibanye Stillwater will offset losses from the drop in Sibanye Stillwater's long position.| FUYO GENERAL vs. United Rentals | FUYO GENERAL vs. Superior Plus Corp | FUYO GENERAL vs. NMI Holdings | FUYO GENERAL vs. Origin Agritech |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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