Correlation Between FUYO GENERAL and Gold Road
Can any of the company-specific risk be diversified away by investing in both FUYO GENERAL and Gold Road 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 Gold Road 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 Gold Road Resources, you can compare the effects of market volatilities on FUYO GENERAL and Gold Road 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 Gold Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and Gold Road.
Diversification Opportunities for FUYO GENERAL and Gold Road
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FUYO and Gold is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE and Gold Road Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Road Resources 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 Gold Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Road Resources has no effect on the direction of FUYO GENERAL i.e., FUYO GENERAL and Gold Road go up and down completely randomly.
Pair Corralation between FUYO GENERAL and Gold Road
Assuming the 90 days horizon FUYO GENERAL LEASE is expected to under-perform the Gold Road. But the stock apears to be less risky and, when comparing its historical volatility, FUYO GENERAL LEASE is 1.64 times less risky than Gold Road. The stock trades about -0.06 of its potential returns per unit of risk. The Gold Road Resources is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest 125.00 in Gold Road Resources on November 4, 2024 and sell it today you would earn a total of 23.00 from holding Gold Road Resources or generate 18.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FUYO GENERAL LEASE vs. Gold Road Resources
Performance |
| Timeline |
| FUYO GENERAL LEASE |
| Gold Road Resources |
FUYO GENERAL and Gold Road Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUYO GENERAL and Gold Road
The main advantage of trading using opposite FUYO GENERAL and Gold Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUYO GENERAL position performs unexpectedly, Gold Road 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 Gold Road will offset losses from the drop in Gold Road's long position.| FUYO GENERAL vs. Mitsui Chemicals | FUYO GENERAL vs. CHEMICAL INDUSTRIES | FUYO GENERAL vs. Calibre Mining Corp | FUYO GENERAL vs. Silicon Motion Technology |
| Gold Road vs. ZIJIN MINH UNSPADR20 | Gold Road vs. Newmont | Gold Road vs. Barrick Gold | Gold Road vs. Franco Nevada |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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