Correlation Between FUYO GENERAL and GEELY AUTOMOBILE
Can any of the company-specific risk be diversified away by investing in both FUYO GENERAL and GEELY AUTOMOBILE 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 GEELY AUTOMOBILE 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 GEELY AUTOMOBILE, you can compare the effects of market volatilities on FUYO GENERAL and GEELY AUTOMOBILE 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 GEELY AUTOMOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and GEELY AUTOMOBILE.
Diversification Opportunities for FUYO GENERAL and GEELY AUTOMOBILE
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FUYO and GEELY is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE and GEELY AUTOMOBILE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEELY AUTOMOBILE 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 GEELY AUTOMOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEELY AUTOMOBILE has no effect on the direction of FUYO GENERAL i.e., FUYO GENERAL and GEELY AUTOMOBILE go up and down completely randomly.
Pair Corralation between FUYO GENERAL and GEELY AUTOMOBILE
Assuming the 90 days horizon FUYO GENERAL is expected to generate 98.56 times less return on investment than GEELY AUTOMOBILE. But when comparing it to its historical volatility, FUYO GENERAL LEASE is 1.69 times less risky than GEELY AUTOMOBILE. It trades about 0.0 of its potential returns per unit of risk. GEELY AUTOMOBILE is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 94.00 in GEELY AUTOMOBILE on August 28, 2024 and sell it today you would earn a total of 64.00 from holding GEELY AUTOMOBILE or generate 68.09% 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. GEELY AUTOMOBILE
Performance |
| Timeline |
| FUYO GENERAL LEASE |
| GEELY AUTOMOBILE |
FUYO GENERAL and GEELY AUTOMOBILE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUYO GENERAL and GEELY AUTOMOBILE
The main advantage of trading using opposite FUYO GENERAL and GEELY AUTOMOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUYO GENERAL position performs unexpectedly, GEELY AUTOMOBILE 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 GEELY AUTOMOBILE will offset losses from the drop in GEELY AUTOMOBILE's long position.| FUYO GENERAL vs. Superior Plus Corp | FUYO GENERAL vs. NMI Holdings | FUYO GENERAL vs. Origin Agritech | FUYO GENERAL vs. SIVERS SEMICONDUCTORS AB |
| GEELY AUTOMOBILE vs. Apple Inc | GEELY AUTOMOBILE vs. Apple Inc | GEELY AUTOMOBILE vs. Microsoft | GEELY AUTOMOBILE vs. Microsoft |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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