Correlation Between ANGANG STEEL and Fukuyama Transporting
Can any of the company-specific risk be diversified away by investing in both ANGANG STEEL and Fukuyama Transporting 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 ANGANG STEEL and Fukuyama Transporting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANGANG STEEL H and Fukuyama Transporting Co, you can compare the effects of market volatilities on ANGANG STEEL and Fukuyama Transporting 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 ANGANG STEEL with a short position of Fukuyama Transporting. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGANG STEEL and Fukuyama Transporting.
Diversification Opportunities for ANGANG STEEL and Fukuyama Transporting
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ANGANG and Fukuyama is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding ANGANG STEEL H and Fukuyama Transporting Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fukuyama Transporting and ANGANG STEEL 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 ANGANG STEEL H are associated (or correlated) with Fukuyama Transporting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fukuyama Transporting has no effect on the direction of ANGANG STEEL i.e., ANGANG STEEL and Fukuyama Transporting go up and down completely randomly.
Pair Corralation between ANGANG STEEL and Fukuyama Transporting
Assuming the 90 days trading horizon ANGANG STEEL is expected to generate 3.32 times less return on investment than Fukuyama Transporting. In addition to that, ANGANG STEEL is 1.94 times more volatile than Fukuyama Transporting Co. It trades about 0.01 of its total potential returns per unit of risk. Fukuyama Transporting Co is currently generating about 0.09 per unit of volatility. If you would invest 2,100 in Fukuyama Transporting Co on October 16, 2024 and sell it today you would earn a total of 100.00 from holding Fukuyama Transporting Co or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.37% |
| Values | Daily Returns |
ANGANG STEEL H vs. Fukuyama Transporting Co
Performance |
| Timeline |
| ANGANG STEEL H |
| Fukuyama Transporting |
ANGANG STEEL and Fukuyama Transporting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANGANG STEEL and Fukuyama Transporting
The main advantage of trading using opposite ANGANG STEEL and Fukuyama Transporting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANGANG STEEL position performs unexpectedly, Fukuyama Transporting 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 Fukuyama Transporting will offset losses from the drop in Fukuyama Transporting's long position.| ANGANG STEEL vs. WIZZ AIR HLDGUNSPADR4 | ANGANG STEEL vs. URBAN OUTFITTERS | ANGANG STEEL vs. TITANIUM TRANSPORTGROUP | ANGANG STEEL vs. Gaztransport Technigaz SA |
| Fukuyama Transporting vs. Sch Environnement SA | Fukuyama Transporting vs. Fair Isaac Corp | Fukuyama Transporting vs. SOGECLAIR SA INH | Fukuyama Transporting vs. ANGANG STEEL H |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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