Correlation Between Formidable Fortress and China Yuchai
Can any of the company-specific risk be diversified away by investing in both Formidable Fortress and China Yuchai 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 Formidable Fortress and China Yuchai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Formidable Fortress ETF and China Yuchai International, you can compare the effects of market volatilities on Formidable Fortress and China Yuchai 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 Formidable Fortress with a short position of China Yuchai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Formidable Fortress and China Yuchai.
Diversification Opportunities for Formidable Fortress and China Yuchai
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Formidable and China is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Formidable Fortress ETF and China Yuchai International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Yuchai Interna and Formidable Fortress 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 Formidable Fortress ETF are associated (or correlated) with China Yuchai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Yuchai Interna has no effect on the direction of Formidable Fortress i.e., Formidable Fortress and China Yuchai go up and down completely randomly.
Pair Corralation between Formidable Fortress and China Yuchai
Given the investment horizon of 90 days Formidable Fortress ETF is expected to generate 0.36 times more return on investment than China Yuchai. However, Formidable Fortress ETF is 2.8 times less risky than China Yuchai. It trades about 0.08 of its potential returns per unit of risk. China Yuchai International is currently generating about 0.0 per unit of risk. If you would invest 2,541 in Formidable Fortress ETF on August 26, 2024 and sell it today you would earn a total of 537.00 from holding Formidable Fortress ETF or generate 21.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Formidable Fortress ETF vs. China Yuchai International
Performance |
| Timeline |
| Formidable Fortress ETF |
| China Yuchai Interna |
Formidable Fortress and China Yuchai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Formidable Fortress and China Yuchai
The main advantage of trading using opposite Formidable Fortress and China Yuchai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Formidable Fortress position performs unexpectedly, China Yuchai 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 China Yuchai will offset losses from the drop in China Yuchai's long position.| Formidable Fortress vs. Vanguard Mid Cap Index | Formidable Fortress vs. Vanguard Extended Market | Formidable Fortress vs. iShares Core SP | Formidable Fortress vs. SPDR SP MIDCAP |
| China Yuchai vs. China Natural Resources | China Yuchai vs. Sonida Senior Living | China Yuchai vs. UTStarcom Holdings Corp | China Yuchai vs. Deswell Industries |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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