Correlation Between FUYO GENERAL and Cabot
Can any of the company-specific risk be diversified away by investing in both FUYO GENERAL and Cabot 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 Cabot 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 Cabot, you can compare the effects of market volatilities on FUYO GENERAL and Cabot 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 Cabot. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and Cabot.
Diversification Opportunities for FUYO GENERAL and Cabot
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FUYO and Cabot is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE and Cabot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cabot 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 Cabot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cabot has no effect on the direction of FUYO GENERAL i.e., FUYO GENERAL and Cabot go up and down completely randomly.
Pair Corralation between FUYO GENERAL and Cabot
Assuming the 90 days horizon FUYO GENERAL is expected to generate 1.91 times less return on investment than Cabot. But when comparing it to its historical volatility, FUYO GENERAL LEASE is 1.21 times less risky than Cabot. It trades about 0.03 of its potential returns per unit of risk. Cabot is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 6,281 in Cabot on October 11, 2024 and sell it today you would earn a total of 2,119 from holding Cabot or generate 33.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
FUYO GENERAL LEASE vs. Cabot
Performance |
| Timeline |
| FUYO GENERAL LEASE |
| Cabot |
FUYO GENERAL and Cabot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUYO GENERAL and Cabot
The main advantage of trading using opposite FUYO GENERAL and Cabot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUYO GENERAL position performs unexpectedly, Cabot 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 Cabot will offset losses from the drop in Cabot's long position.| FUYO GENERAL vs. CarsalesCom | FUYO GENERAL vs. CANON MARKETING JP | FUYO GENERAL vs. CDN IMPERIAL BANK | FUYO GENERAL vs. Commonwealth Bank of |
| Cabot vs. QBE Insurance Group | Cabot vs. Insurance Australia Group | Cabot vs. FUYO GENERAL LEASE | Cabot vs. SBI Insurance Group |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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