Correlation Between FUYO GENERAL and Esprinet SpA
Can any of the company-specific risk be diversified away by investing in both FUYO GENERAL and Esprinet SpA 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 Esprinet SpA 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 Esprinet SpA, you can compare the effects of market volatilities on FUYO GENERAL and Esprinet SpA 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 Esprinet SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and Esprinet SpA.
Diversification Opportunities for FUYO GENERAL and Esprinet SpA
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FUYO and Esprinet is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE and Esprinet SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esprinet SpA 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 Esprinet SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Esprinet SpA has no effect on the direction of FUYO GENERAL i.e., FUYO GENERAL and Esprinet SpA go up and down completely randomly.
Pair Corralation between FUYO GENERAL and Esprinet SpA
Assuming the 90 days horizon FUYO GENERAL LEASE is expected to generate 0.72 times more return on investment than Esprinet SpA. However, FUYO GENERAL LEASE is 1.39 times less risky than Esprinet SpA. It trades about 0.02 of its potential returns per unit of risk. Esprinet SpA is currently generating about -0.05 per unit of risk. If you would invest 7,000 in FUYO GENERAL LEASE on September 29, 2024 and sell it today you would earn a total of 100.00 from holding FUYO GENERAL LEASE or generate 1.43% 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. Esprinet SpA
Performance |
| Timeline |
| FUYO GENERAL LEASE |
| Esprinet SpA |
FUYO GENERAL and Esprinet SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUYO GENERAL and Esprinet SpA
The main advantage of trading using opposite FUYO GENERAL and Esprinet SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUYO GENERAL position performs unexpectedly, Esprinet SpA 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 Esprinet SpA will offset losses from the drop in Esprinet SpA's long position.| FUYO GENERAL vs. Ashtead Group plc | FUYO GENERAL vs. WillScot Mobile Mini | FUYO GENERAL vs. Avis Budget Group | FUYO GENERAL vs. Sixt SE |
| Esprinet SpA vs. Air Lease | Esprinet SpA vs. FUYO GENERAL LEASE | Esprinet SpA vs. Kaufman Broad SA | Esprinet SpA vs. Elmos Semiconductor SE |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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