Correlation Between Fuyao Glass and Kongsberg Automotive
Can any of the company-specific risk be diversified away by investing in both Fuyao Glass and Kongsberg Automotive 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 Kongsberg Automotive 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 Kongsberg Automotive ASA, you can compare the effects of market volatilities on Fuyao Glass and Kongsberg Automotive 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 Kongsberg Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuyao Glass and Kongsberg Automotive.
Diversification Opportunities for Fuyao Glass and Kongsberg Automotive
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fuyao and Kongsberg is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Fuyao Glass Industry and Kongsberg Automotive ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kongsberg Automotive ASA 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 Kongsberg Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kongsberg Automotive ASA has no effect on the direction of Fuyao Glass i.e., Fuyao Glass and Kongsberg Automotive go up and down completely randomly.
Pair Corralation between Fuyao Glass and Kongsberg Automotive
If you would invest 11.00 in Kongsberg Automotive ASA on October 7, 2024 and sell it today you would earn a total of 0.00 from holding Kongsberg Automotive ASA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Fuyao Glass Industry vs. Kongsberg Automotive ASA
Performance |
| Timeline |
| Fuyao Glass Industry |
| Kongsberg Automotive ASA |
Fuyao Glass and Kongsberg Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuyao Glass and Kongsberg Automotive
The main advantage of trading using opposite Fuyao Glass and Kongsberg Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuyao Glass position performs unexpectedly, Kongsberg Automotive 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 Kongsberg Automotive will offset losses from the drop in Kongsberg Automotive's long position.| Fuyao Glass vs. JBG SMITH Properties | Fuyao Glass vs. Canlan Ice Sports | Fuyao Glass vs. Here Media | Fuyao Glass vs. Rocky Brands |
| Kongsberg Automotive vs. Magna International | Kongsberg Automotive vs. Aeye Inc | Kongsberg Automotive vs. Hyliion Holdings Corp | Kongsberg Automotive vs. Luminar Technologies |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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