Correlation Between FUYO GENERAL and Pentair Plc
Can any of the company-specific risk be diversified away by investing in both FUYO GENERAL and Pentair Plc 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 Pentair Plc 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 Pentair plc, you can compare the effects of market volatilities on FUYO GENERAL and Pentair Plc 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 Pentair Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and Pentair Plc.
Diversification Opportunities for FUYO GENERAL and Pentair Plc
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FUYO and Pentair is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE and Pentair plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pentair plc 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 Pentair Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pentair plc has no effect on the direction of FUYO GENERAL i.e., FUYO GENERAL and Pentair Plc go up and down completely randomly.
Pair Corralation between FUYO GENERAL and Pentair Plc
Assuming the 90 days horizon FUYO GENERAL is expected to generate 5.49 times less return on investment than Pentair Plc. But when comparing it to its historical volatility, FUYO GENERAL LEASE is 1.12 times less risky than Pentair Plc. It trades about 0.02 of its potential returns per unit of risk. Pentair plc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 5,016 in Pentair plc on October 16, 2024 and sell it today you would earn a total of 4,554 from holding Pentair plc or generate 90.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FUYO GENERAL LEASE vs. Pentair plc
Performance |
| Timeline |
| FUYO GENERAL LEASE |
| Pentair plc |
FUYO GENERAL and Pentair Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUYO GENERAL and Pentair Plc
The main advantage of trading using opposite FUYO GENERAL and Pentair Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUYO GENERAL position performs unexpectedly, Pentair Plc 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 Pentair Plc will offset losses from the drop in Pentair Plc's long position.| FUYO GENERAL vs. Tower Semiconductor | FUYO GENERAL vs. GRIFFIN MINING LTD | FUYO GENERAL vs. Calibre Mining Corp | FUYO GENERAL vs. betterU Education Corp |
| Pentair Plc vs. Sixt Leasing SE | Pentair Plc vs. SALESFORCE INC CDR | Pentair Plc vs. 24SEVENOFFICE GROUP AB | Pentair Plc vs. FUYO GENERAL LEASE |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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