Correlation Between FUYO GENERAL and Applied Materials
Can any of the company-specific risk be diversified away by investing in both FUYO GENERAL and Applied Materials 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 Applied Materials 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 Applied Materials, you can compare the effects of market volatilities on FUYO GENERAL and Applied Materials 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 Applied Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and Applied Materials.
Diversification Opportunities for FUYO GENERAL and Applied Materials
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between FUYO and Applied is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE and Applied Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Materials 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 Applied Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Materials has no effect on the direction of FUYO GENERAL i.e., FUYO GENERAL and Applied Materials go up and down completely randomly.
Pair Corralation between FUYO GENERAL and Applied Materials
Assuming the 90 days horizon FUYO GENERAL LEASE is expected to generate 0.41 times more return on investment than Applied Materials. However, FUYO GENERAL LEASE is 2.42 times less risky than Applied Materials. It trades about -0.01 of its potential returns per unit of risk. Applied Materials is currently generating about -0.01 per unit of risk. If you would invest 6,950 in FUYO GENERAL LEASE on October 30, 2024 and sell it today you would lose (50.00) from holding FUYO GENERAL LEASE or give up 0.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FUYO GENERAL LEASE vs. Applied Materials
Performance |
| Timeline |
| FUYO GENERAL LEASE |
| Applied Materials |
FUYO GENERAL and Applied Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUYO GENERAL and Applied Materials
The main advantage of trading using opposite FUYO GENERAL and Applied Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUYO GENERAL position performs unexpectedly, Applied Materials 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 Applied Materials will offset losses from the drop in Applied Materials' long position.| FUYO GENERAL vs. MACOM Technology Solutions | FUYO GENERAL vs. Spirent Communications plc | FUYO GENERAL vs. Easy Software AG | FUYO GENERAL vs. CLEAN ENERGY FUELS |
| Applied Materials vs. ASML Holding NV | Applied Materials vs. KLA Corporation | Applied Materials vs. Teradyne | Applied Materials vs. ASM International NV |
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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