Correlation Between FUYO GENERAL and Clean Energy
Can any of the company-specific risk be diversified away by investing in both FUYO GENERAL and Clean Energy 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 Clean Energy 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 Clean Energy Fuels, you can compare the effects of market volatilities on FUYO GENERAL and Clean Energy 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 Clean Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and Clean Energy.
Diversification Opportunities for FUYO GENERAL and Clean Energy
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FUYO and Clean is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE and Clean Energy Fuels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Energy Fuels 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 Clean Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Energy Fuels has no effect on the direction of FUYO GENERAL i.e., FUYO GENERAL and Clean Energy go up and down completely randomly.
Pair Corralation between FUYO GENERAL and Clean Energy
Assuming the 90 days horizon FUYO GENERAL LEASE is expected to under-perform the Clean Energy. But the stock apears to be less risky and, when comparing its historical volatility, FUYO GENERAL LEASE is 2.92 times less risky than Clean Energy. The stock trades about -0.02 of its potential returns per unit of risk. The Clean Energy Fuels is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 256.00 in Clean Energy Fuels on September 3, 2024 and sell it today you would earn a total of 35.00 from holding Clean Energy Fuels or generate 13.67% 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. Clean Energy Fuels
Performance |
| Timeline |
| FUYO GENERAL LEASE |
| Clean Energy Fuels |
FUYO GENERAL and Clean Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUYO GENERAL and Clean Energy
The main advantage of trading using opposite FUYO GENERAL and Clean Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUYO GENERAL position performs unexpectedly, Clean Energy 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 Clean Energy will offset losses from the drop in Clean Energy's long position.| FUYO GENERAL vs. United Rentals | FUYO GENERAL vs. Ashtead Group plc | FUYO GENERAL vs. WillScot Mobile Mini | FUYO GENERAL vs. Sixt SE |
| Clean Energy vs. Marathon Petroleum Corp | Clean Energy vs. Neste Oyj | Clean Energy vs. ENEOS Holdings | Clean Energy vs. PTT OILRETBUS FOR BA10 |
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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