Correlation Between FUYO GENERAL and Diamondrock Hospitality
Can any of the company-specific risk be diversified away by investing in both FUYO GENERAL and Diamondrock Hospitality 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 Diamondrock Hospitality 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 Diamondrock Hospitality Co, you can compare the effects of market volatilities on FUYO GENERAL and Diamondrock Hospitality 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 Diamondrock Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and Diamondrock Hospitality.
Diversification Opportunities for FUYO GENERAL and Diamondrock Hospitality
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FUYO and Diamondrock is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE and Diamondrock Hospitality Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamondrock Hospitality 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 Diamondrock Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamondrock Hospitality has no effect on the direction of FUYO GENERAL i.e., FUYO GENERAL and Diamondrock Hospitality go up and down completely randomly.
Pair Corralation between FUYO GENERAL and Diamondrock Hospitality
Assuming the 90 days horizon FUYO GENERAL LEASE is expected to generate 0.79 times more return on investment than Diamondrock Hospitality. However, FUYO GENERAL LEASE is 1.26 times less risky than Diamondrock Hospitality. It trades about 0.03 of its potential returns per unit of risk. Diamondrock Hospitality Co is currently generating about 0.02 per unit of risk. If you would invest 5,950 in FUYO GENERAL LEASE on August 28, 2024 and sell it today you would earn a total of 900.00 from holding FUYO GENERAL LEASE or generate 15.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FUYO GENERAL LEASE vs. Diamondrock Hospitality Co
Performance |
| Timeline |
| FUYO GENERAL LEASE |
| Diamondrock Hospitality |
FUYO GENERAL and Diamondrock Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUYO GENERAL and Diamondrock Hospitality
The main advantage of trading using opposite FUYO GENERAL and Diamondrock Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUYO GENERAL position performs unexpectedly, Diamondrock Hospitality 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 Diamondrock Hospitality will offset losses from the drop in Diamondrock Hospitality'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 |
| Diamondrock Hospitality vs. Apple Inc | Diamondrock Hospitality vs. Apple Inc | Diamondrock Hospitality vs. Apple Inc | Diamondrock Hospitality vs. Apple Inc |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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