Correlation Between FUYO GENERAL and Lendlease
Can any of the company-specific risk be diversified away by investing in both FUYO GENERAL and Lendlease 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 Lendlease 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 Lendlease Group, you can compare the effects of market volatilities on FUYO GENERAL and Lendlease 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 Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and Lendlease.
Diversification Opportunities for FUYO GENERAL and Lendlease
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FUYO and Lendlease is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group 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 Lendlease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendlease Group has no effect on the direction of FUYO GENERAL i.e., FUYO GENERAL and Lendlease go up and down completely randomly.
Pair Corralation between FUYO GENERAL and Lendlease
Assuming the 90 days horizon FUYO GENERAL LEASE is expected to generate 0.75 times more return on investment than Lendlease. However, FUYO GENERAL LEASE is 1.33 times less risky than Lendlease. It trades about 0.02 of its potential returns per unit of risk. Lendlease Group is currently generating about -0.01 per unit of risk. If you would invest 6,100 in FUYO GENERAL LEASE on August 27, 2024 and sell it today you would earn a total of 650.00 from holding FUYO GENERAL LEASE or generate 10.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FUYO GENERAL LEASE vs. Lendlease Group
Performance |
| Timeline |
| FUYO GENERAL LEASE |
| Lendlease Group |
FUYO GENERAL and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUYO GENERAL and Lendlease
The main advantage of trading using opposite FUYO GENERAL and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUYO GENERAL position performs unexpectedly, Lendlease 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 Lendlease will offset losses from the drop in Lendlease's long position.| FUYO GENERAL vs. United Rentals | FUYO GENERAL vs. Superior Plus Corp | FUYO GENERAL vs. NMI Holdings | FUYO GENERAL vs. Origin Agritech |
| Lendlease vs. Singapore Telecommunications Limited | Lendlease vs. ANTA SPORTS PRODUCT | Lendlease vs. USWE SPORTS AB | Lendlease vs. Fukuyama Transporting Co |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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