Correlation Between FUYO GENERAL and Haier Smart
Can any of the company-specific risk be diversified away by investing in both FUYO GENERAL and Haier Smart 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 Haier Smart 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 Haier Smart Home, you can compare the effects of market volatilities on FUYO GENERAL and Haier Smart 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 Haier Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and Haier Smart.
Diversification Opportunities for FUYO GENERAL and Haier Smart
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FUYO and Haier is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE and Haier Smart Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haier Smart Home 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 Haier Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haier Smart Home has no effect on the direction of FUYO GENERAL i.e., FUYO GENERAL and Haier Smart go up and down completely randomly.
Pair Corralation between FUYO GENERAL and Haier Smart
Assuming the 90 days horizon FUYO GENERAL LEASE is expected to under-perform the Haier Smart. But the stock apears to be less risky and, when comparing its historical volatility, FUYO GENERAL LEASE is 1.61 times less risky than Haier Smart. The stock trades about -0.02 of its potential returns per unit of risk. The Haier Smart Home is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 151.00 in Haier Smart Home on September 3, 2024 and sell it today you would earn a total of 25.00 from holding Haier Smart Home or generate 16.56% 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. Haier Smart Home
Performance |
| Timeline |
| FUYO GENERAL LEASE |
| Haier Smart Home |
FUYO GENERAL and Haier Smart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUYO GENERAL and Haier Smart
The main advantage of trading using opposite FUYO GENERAL and Haier Smart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUYO GENERAL position performs unexpectedly, Haier Smart 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 Haier Smart will offset losses from the drop in Haier Smart'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 |
| Haier Smart vs. Sixt Leasing SE | Haier Smart vs. ALGOMA STEEL GROUP | Haier Smart vs. Tianjin Capital Environmental | Haier Smart vs. Perma Fix Environmental Services |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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