Correlation Between FUYO GENERAL and STMICROELECTRONICS
Can any of the company-specific risk be diversified away by investing in both FUYO GENERAL and STMICROELECTRONICS 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 STMICROELECTRONICS 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 STMICROELECTRONICS, you can compare the effects of market volatilities on FUYO GENERAL and STMICROELECTRONICS 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 STMICROELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and STMICROELECTRONICS.
Diversification Opportunities for FUYO GENERAL and STMICROELECTRONICS
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FUYO and STMICROELECTRONICS is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE and STMICROELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STMICROELECTRONICS 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 STMICROELECTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STMICROELECTRONICS has no effect on the direction of FUYO GENERAL i.e., FUYO GENERAL and STMICROELECTRONICS go up and down completely randomly.
Pair Corralation between FUYO GENERAL and STMICROELECTRONICS
Assuming the 90 days horizon FUYO GENERAL LEASE is expected to under-perform the STMICROELECTRONICS. But the stock apears to be less risky and, when comparing its historical volatility, FUYO GENERAL LEASE is 1.81 times less risky than STMICROELECTRONICS. The stock trades about -0.06 of its potential returns per unit of risk. The STMICROELECTRONICS is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,397 in STMICROELECTRONICS on October 20, 2024 and sell it today you would earn a total of 19.00 from holding STMICROELECTRONICS or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
FUYO GENERAL LEASE vs. STMICROELECTRONICS
Performance |
| Timeline |
| FUYO GENERAL LEASE |
| STMICROELECTRONICS |
FUYO GENERAL and STMICROELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUYO GENERAL and STMICROELECTRONICS
The main advantage of trading using opposite FUYO GENERAL and STMICROELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUYO GENERAL position performs unexpectedly, STMICROELECTRONICS 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 STMICROELECTRONICS will offset losses from the drop in STMICROELECTRONICS's long position.| FUYO GENERAL vs. SERI INDUSTRIAL EO | FUYO GENERAL vs. JAPAN TOBACCO UNSPADR12 | FUYO GENERAL vs. Zijin Mining Group | FUYO GENERAL vs. Harmony Gold Mining |
| STMICROELECTRONICS vs. Transport International Holdings | STMICROELECTRONICS vs. JLF INVESTMENT | STMICROELECTRONICS vs. Yuexiu Transport Infrastructure | STMICROELECTRONICS vs. Chuangs China Investments |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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