Correlation Between FUYO GENERAL and BYD ELECTRONIC
Can any of the company-specific risk be diversified away by investing in both FUYO GENERAL and BYD ELECTRONIC 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 BYD ELECTRONIC 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 BYD ELECTRONIC, you can compare the effects of market volatilities on FUYO GENERAL and BYD ELECTRONIC 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 BYD ELECTRONIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and BYD ELECTRONIC.
Diversification Opportunities for FUYO GENERAL and BYD ELECTRONIC
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FUYO and BYD is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE and BYD ELECTRONIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BYD ELECTRONIC 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 BYD ELECTRONIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BYD ELECTRONIC has no effect on the direction of FUYO GENERAL i.e., FUYO GENERAL and BYD ELECTRONIC go up and down completely randomly.
Pair Corralation between FUYO GENERAL and BYD ELECTRONIC
Assuming the 90 days horizon FUYO GENERAL LEASE is expected to generate 0.35 times more return on investment than BYD ELECTRONIC. However, FUYO GENERAL LEASE is 2.84 times less risky than BYD ELECTRONIC. It trades about 0.24 of its potential returns per unit of risk. BYD ELECTRONIC is currently generating about 0.04 per unit of risk. If you would invest 6,500 in FUYO GENERAL LEASE on September 3, 2024 and sell it today you would earn a total of 450.00 from holding FUYO GENERAL LEASE or generate 6.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FUYO GENERAL LEASE vs. BYD ELECTRONIC
Performance |
| Timeline |
| FUYO GENERAL LEASE |
| BYD ELECTRONIC |
FUYO GENERAL and BYD ELECTRONIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUYO GENERAL and BYD ELECTRONIC
The main advantage of trading using opposite FUYO GENERAL and BYD ELECTRONIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUYO GENERAL position performs unexpectedly, BYD ELECTRONIC 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 BYD ELECTRONIC will offset losses from the drop in BYD ELECTRONIC's long position.| FUYO GENERAL vs. United Rentals | FUYO GENERAL vs. Ashtead Group plc | FUYO GENERAL vs. WillScot Mobile Mini | FUYO GENERAL vs. Sixt SE |
| BYD ELECTRONIC vs. RETAIL FOOD GROUP | BYD ELECTRONIC vs. MOLSON RS BEVERAGE | BYD ELECTRONIC vs. GEELY AUTOMOBILE | BYD ELECTRONIC vs. National Retail Properties |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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