Correlation Between FUYO GENERAL and NH HOTEL
Can any of the company-specific risk be diversified away by investing in both FUYO GENERAL and NH HOTEL 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 NH HOTEL 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 NH HOTEL GROUP, you can compare the effects of market volatilities on FUYO GENERAL and NH HOTEL 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 NH HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and NH HOTEL.
Diversification Opportunities for FUYO GENERAL and NH HOTEL
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FUYO and NH5 is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE and NH HOTEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH HOTEL 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 NH HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH HOTEL GROUP has no effect on the direction of FUYO GENERAL i.e., FUYO GENERAL and NH HOTEL go up and down completely randomly.
Pair Corralation between FUYO GENERAL and NH HOTEL
Assuming the 90 days horizon FUYO GENERAL is expected to generate 1.04 times less return on investment than NH HOTEL. But when comparing it to its historical volatility, FUYO GENERAL LEASE is 1.91 times less risky than NH HOTEL. It trades about 0.01 of its potential returns per unit of risk. NH HOTEL GROUP is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 450.00 in NH HOTEL GROUP on August 31, 2024 and sell it today you would lose (39.00) from holding NH HOTEL GROUP or give up 8.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FUYO GENERAL LEASE vs. NH HOTEL GROUP
Performance |
| Timeline |
| FUYO GENERAL LEASE |
| NH HOTEL GROUP |
FUYO GENERAL and NH HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUYO GENERAL and NH HOTEL
The main advantage of trading using opposite FUYO GENERAL and NH HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUYO GENERAL position performs unexpectedly, NH HOTEL 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 NH HOTEL will offset losses from the drop in NH HOTEL's long position.| FUYO GENERAL vs. United Rentals | FUYO GENERAL vs. Superior Plus Corp | FUYO GENERAL vs. NMI Holdings | FUYO GENERAL vs. Origin Agritech |
| NH HOTEL vs. Take Two Interactive Software | NH HOTEL vs. CyberArk Software | NH HOTEL vs. KINGBOARD CHEMICAL | NH HOTEL vs. ATOSS SOFTWARE |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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