Correlation Between FUYO GENERAL and CHINA EDUCATION
Can any of the company-specific risk be diversified away by investing in both FUYO GENERAL and CHINA EDUCATION 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 CHINA EDUCATION 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 CHINA EDUCATION GROUP, you can compare the effects of market volatilities on FUYO GENERAL and CHINA EDUCATION 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 CHINA EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and CHINA EDUCATION.
Diversification Opportunities for FUYO GENERAL and CHINA EDUCATION
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FUYO and CHINA is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE and CHINA EDUCATION GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA EDUCATION GROUP 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 CHINA EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA EDUCATION GROUP has no effect on the direction of FUYO GENERAL i.e., FUYO GENERAL and CHINA EDUCATION go up and down completely randomly.
Pair Corralation between FUYO GENERAL and CHINA EDUCATION
Assuming the 90 days horizon FUYO GENERAL is expected to generate 24.45 times less return on investment than CHINA EDUCATION. But when comparing it to its historical volatility, FUYO GENERAL LEASE is 2.21 times less risky than CHINA EDUCATION. It trades about 0.01 of its potential returns per unit of risk. CHINA EDUCATION GROUP is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 41.00 in CHINA EDUCATION GROUP on November 3, 2024 and sell it today you would earn a total of 1.00 from holding CHINA EDUCATION GROUP or generate 2.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FUYO GENERAL LEASE vs. CHINA EDUCATION GROUP
Performance |
| Timeline |
| FUYO GENERAL LEASE |
| CHINA EDUCATION GROUP |
FUYO GENERAL and CHINA EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUYO GENERAL and CHINA EDUCATION
The main advantage of trading using opposite FUYO GENERAL and CHINA EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUYO GENERAL position performs unexpectedly, CHINA EDUCATION 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 CHINA EDUCATION will offset losses from the drop in CHINA EDUCATION's long position.| FUYO GENERAL vs. SANOK RUBBER ZY | FUYO GENERAL vs. MOVIE GAMES SA | FUYO GENERAL vs. Summit Materials | FUYO GENERAL vs. UNIVERSAL MUSIC GROUP |
| CHINA EDUCATION vs. ONWARD MEDICAL BV | CHINA EDUCATION vs. WESANA HEALTH HOLD | CHINA EDUCATION vs. Siemens Healthineers AG | CHINA EDUCATION vs. CARDINAL HEALTH |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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