Correlation Between Fuyao Glass and Compagnie Generale
Can any of the company-specific risk be diversified away by investing in both Fuyao Glass and Compagnie Generale 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 Compagnie Generale 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 Compagnie Generale des, you can compare the effects of market volatilities on Fuyao Glass and Compagnie Generale 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 Compagnie Generale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuyao Glass and Compagnie Generale.
Diversification Opportunities for Fuyao Glass and Compagnie Generale
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fuyao and Compagnie is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Fuyao Glass Industry and Compagnie Generale des in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Generale des 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 Compagnie Generale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Generale des has no effect on the direction of Fuyao Glass i.e., Fuyao Glass and Compagnie Generale go up and down completely randomly.
Pair Corralation between Fuyao Glass and Compagnie Generale
Assuming the 90 days horizon Fuyao Glass Industry is expected to generate 3.48 times more return on investment than Compagnie Generale. However, Fuyao Glass is 3.48 times more volatile than Compagnie Generale des. It trades about 0.08 of its potential returns per unit of risk. Compagnie Generale des is currently generating about 0.04 per unit of risk. If you would invest 45.00 in Fuyao Glass Industry on August 30, 2024 and sell it today you would earn a total of 127.00 from holding Fuyao Glass Industry or generate 282.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fuyao Glass Industry vs. Compagnie Generale des
Performance |
| Timeline |
| Fuyao Glass Industry |
| Compagnie Generale des |
Fuyao Glass and Compagnie Generale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuyao Glass and Compagnie Generale
The main advantage of trading using opposite Fuyao Glass and Compagnie Generale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuyao Glass position performs unexpectedly, Compagnie Generale 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 Compagnie Generale will offset losses from the drop in Compagnie Generale's long position.| Fuyao Glass vs. Universal | Fuyao Glass vs. Turning Point Brands | Fuyao Glass vs. CVW CleanTech | Fuyao Glass vs. Ultra Clean Holdings |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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