Correlation Between FUYO GENERAL and AS Tallink
Can any of the company-specific risk be diversified away by investing in both FUYO GENERAL and AS Tallink 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 AS Tallink 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 AS Tallink Grupp, you can compare the effects of market volatilities on FUYO GENERAL and AS Tallink 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 AS Tallink. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and AS Tallink.
Diversification Opportunities for FUYO GENERAL and AS Tallink
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FUYO and T5N is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE and AS Tallink Grupp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AS Tallink Grupp 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 AS Tallink. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AS Tallink Grupp has no effect on the direction of FUYO GENERAL i.e., FUYO GENERAL and AS Tallink go up and down completely randomly.
Pair Corralation between FUYO GENERAL and AS Tallink
Assuming the 90 days horizon FUYO GENERAL is expected to generate 2.52 times less return on investment than AS Tallink. But when comparing it to its historical volatility, FUYO GENERAL LEASE is 1.3 times less risky than AS Tallink. It trades about 0.01 of its potential returns per unit of risk. AS Tallink Grupp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 51.00 in AS Tallink Grupp on August 31, 2024 and sell it today you would earn a total of 5.00 from holding AS Tallink Grupp or generate 9.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
FUYO GENERAL LEASE vs. AS Tallink Grupp
Performance |
| Timeline |
| FUYO GENERAL LEASE |
| AS Tallink Grupp |
FUYO GENERAL and AS Tallink Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUYO GENERAL and AS Tallink
The main advantage of trading using opposite FUYO GENERAL and AS Tallink positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUYO GENERAL position performs unexpectedly, AS Tallink 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 AS Tallink will offset losses from the drop in AS Tallink's long position.| FUYO GENERAL vs. United Rentals | FUYO GENERAL vs. Superior Plus Corp | FUYO GENERAL vs. NMI Holdings | FUYO GENERAL vs. Origin Agritech |
| AS Tallink vs. Qingdao Port International | AS Tallink vs. Superior Plus Corp | AS Tallink vs. NMI Holdings | AS Tallink vs. Origin Agritech |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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