Correlation Between FUYO GENERAL and Truist Financial
Can any of the company-specific risk be diversified away by investing in both FUYO GENERAL and Truist Financial 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 Truist Financial 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 Truist Financial, you can compare the effects of market volatilities on FUYO GENERAL and Truist Financial 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 Truist Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and Truist Financial.
Diversification Opportunities for FUYO GENERAL and Truist Financial
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between FUYO and Truist is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE and Truist Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Truist Financial 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 Truist Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Truist Financial has no effect on the direction of FUYO GENERAL i.e., FUYO GENERAL and Truist Financial go up and down completely randomly.
Pair Corralation between FUYO GENERAL and Truist Financial
Assuming the 90 days horizon FUYO GENERAL LEASE is expected to under-perform the Truist Financial. But the stock apears to be less risky and, when comparing its historical volatility, FUYO GENERAL LEASE is 1.12 times less risky than Truist Financial. The stock trades about -0.02 of its potential returns per unit of risk. The Truist Financial is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 3,377 in Truist Financial on August 28, 2024 and sell it today you would earn a total of 1,188 from holding Truist Financial or generate 35.18% 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. Truist Financial
Performance |
| Timeline |
| FUYO GENERAL LEASE |
| Truist Financial |
FUYO GENERAL and Truist Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUYO GENERAL and Truist Financial
The main advantage of trading using opposite FUYO GENERAL and Truist Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUYO GENERAL position performs unexpectedly, Truist Financial 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 Truist Financial will offset losses from the drop in Truist Financial's long position.| FUYO GENERAL vs. Superior Plus Corp | FUYO GENERAL vs. NMI Holdings | FUYO GENERAL vs. Origin Agritech | FUYO GENERAL vs. SIVERS SEMICONDUCTORS AB |
| Truist Financial vs. Alfa Financial Software | Truist Financial vs. Commercial Vehicle Group | Truist Financial vs. FUYO GENERAL LEASE | Truist Financial vs. Unity Software |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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