Correlation Between Fuyao Glass and 4 Less
Can any of the company-specific risk be diversified away by investing in both Fuyao Glass and 4 Less 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 Fuyao Glass and 4 Less into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fuyao Glass Industry and 4 Less Group, you can compare the effects of market volatilities on Fuyao Glass and 4 Less 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 Fuyao Glass with a short position of 4 Less. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuyao Glass and 4 Less.
Diversification Opportunities for Fuyao Glass and 4 Less
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fuyao and FLES is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Fuyao Glass Industry and 4 Less Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 4 Less Group and Fuyao Glass 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 Fuyao Glass Industry are associated (or correlated) with 4 Less. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 4 Less Group has no effect on the direction of Fuyao Glass i.e., Fuyao Glass and 4 Less go up and down completely randomly.
Pair Corralation between Fuyao Glass and 4 Less
Assuming the 90 days horizon Fuyao Glass is expected to generate 1.59 times less return on investment than 4 Less. But when comparing it to its historical volatility, Fuyao Glass Industry is 4.59 times less risky than 4 Less. It trades about 0.27 of its potential returns per unit of risk. 4 Less Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 0.02 in 4 Less Group on August 29, 2024 and sell it today you would earn a total of 0.00 from holding 4 Less Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fuyao Glass Industry vs. 4 Less Group
Performance |
| Timeline |
| Fuyao Glass Industry |
| 4 Less Group |
Fuyao Glass and 4 Less Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuyao Glass and 4 Less
The main advantage of trading using opposite Fuyao Glass and 4 Less positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuyao Glass position performs unexpectedly, 4 Less 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 4 Less will offset losses from the drop in 4 Less' long position.| Fuyao Glass vs. Allison Transmission Holdings | Fuyao Glass vs. Luminar Technologies | Fuyao Glass vs. Lear Corporation | Fuyao Glass vs. BorgWarner |
| 4 Less vs. Allison Transmission Holdings | 4 Less vs. Luminar Technologies | 4 Less vs. Lear Corporation | 4 Less vs. BorgWarner |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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