Correlation Between FUYO GENERAL and Stanley Electric
Can any of the company-specific risk be diversified away by investing in both FUYO GENERAL and Stanley Electric 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 Stanley Electric 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 Stanley Electric Co, you can compare the effects of market volatilities on FUYO GENERAL and Stanley Electric 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 Stanley Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and Stanley Electric.
Diversification Opportunities for FUYO GENERAL and Stanley Electric
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FUYO and Stanley is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE and Stanley Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stanley Electric 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 Stanley Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stanley Electric has no effect on the direction of FUYO GENERAL i.e., FUYO GENERAL and Stanley Electric go up and down completely randomly.
Pair Corralation between FUYO GENERAL and Stanley Electric
Assuming the 90 days horizon FUYO GENERAL LEASE is expected to generate 0.82 times more return on investment than Stanley Electric. However, FUYO GENERAL LEASE is 1.23 times less risky than Stanley Electric. It trades about 0.21 of its potential returns per unit of risk. Stanley Electric Co is currently generating about 0.05 per unit of risk. If you would invest 6,650 in FUYO GENERAL LEASE on September 21, 2024 and sell it today you would earn a total of 350.00 from holding FUYO GENERAL LEASE or generate 5.26% 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. Stanley Electric Co
Performance |
| Timeline |
| FUYO GENERAL LEASE |
| Stanley Electric |
FUYO GENERAL and Stanley Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUYO GENERAL and Stanley Electric
The main advantage of trading using opposite FUYO GENERAL and Stanley Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUYO GENERAL position performs unexpectedly, Stanley Electric 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 Stanley Electric will offset losses from the drop in Stanley Electric's long position.| FUYO GENERAL vs. Air Transport Services | FUYO GENERAL vs. EVS Broadcast Equipment | FUYO GENERAL vs. GFL ENVIRONM | FUYO GENERAL vs. Broadcom |
| Stanley Electric vs. FUYO GENERAL LEASE | Stanley Electric vs. RETAIL FOOD GROUP | Stanley Electric vs. PICKN PAY STORES | Stanley Electric vs. United Rentals |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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