Correlation Between FUYO GENERAL and Chesapeake Utilities
Can any of the company-specific risk be diversified away by investing in both FUYO GENERAL and Chesapeake Utilities 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 Chesapeake Utilities 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 Chesapeake Utilities, you can compare the effects of market volatilities on FUYO GENERAL and Chesapeake Utilities 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 Chesapeake Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and Chesapeake Utilities.
Diversification Opportunities for FUYO GENERAL and Chesapeake Utilities
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FUYO and Chesapeake is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE and Chesapeake Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake Utilities 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 Chesapeake Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chesapeake Utilities has no effect on the direction of FUYO GENERAL i.e., FUYO GENERAL and Chesapeake Utilities go up and down completely randomly.
Pair Corralation between FUYO GENERAL and Chesapeake Utilities
Assuming the 90 days horizon FUYO GENERAL is expected to generate 1.03 times less return on investment than Chesapeake Utilities. In addition to that, FUYO GENERAL is 1.04 times more volatile than Chesapeake Utilities. It trades about 0.03 of its total potential returns per unit of risk. Chesapeake Utilities is currently generating about 0.03 per unit of volatility. If you would invest 10,817 in Chesapeake Utilities on August 28, 2024 and sell it today you would earn a total of 1,783 from holding Chesapeake Utilities or generate 16.48% 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. Chesapeake Utilities
Performance |
| Timeline |
| FUYO GENERAL LEASE |
| Chesapeake Utilities |
FUYO GENERAL and Chesapeake Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUYO GENERAL and Chesapeake Utilities
The main advantage of trading using opposite FUYO GENERAL and Chesapeake Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUYO GENERAL position performs unexpectedly, Chesapeake Utilities 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 Chesapeake Utilities will offset losses from the drop in Chesapeake Utilities' long position.| FUYO GENERAL vs. Superior Plus Corp | FUYO GENERAL vs. NMI Holdings | FUYO GENERAL vs. Origin Agritech | FUYO GENERAL vs. SIVERS SEMICONDUCTORS AB |
| Chesapeake Utilities vs. Pure Storage | Chesapeake Utilities vs. Datadog | Chesapeake Utilities vs. Titan Machinery | Chesapeake Utilities vs. DOCDATA |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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