Correlation Between O I and Fuwei Films
Can any of the company-specific risk be diversified away by investing in both O I and Fuwei Films 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 O I and Fuwei Films into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between O I Glass and Fuwei Films Holdings, you can compare the effects of market volatilities on O I and Fuwei Films 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 O I with a short position of Fuwei Films. Check out your portfolio center. Please also check ongoing floating volatility patterns of O I and Fuwei Films.
Diversification Opportunities for O I and Fuwei Films
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between O I and Fuwei is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding O I Glass and Fuwei Films Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuwei Films Holdings and O I 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 O I Glass are associated (or correlated) with Fuwei Films. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuwei Films Holdings has no effect on the direction of O I i.e., O I and Fuwei Films go up and down completely randomly.
Pair Corralation between O I and Fuwei Films
Allowing for the 90-day total investment horizon O I Glass is expected to generate 0.66 times more return on investment than Fuwei Films. However, O I Glass is 1.52 times less risky than Fuwei Films. It trades about 0.04 of its potential returns per unit of risk. Fuwei Films Holdings is currently generating about 0.01 per unit of risk. If you would invest 1,225 in O I Glass on January 19, 2024 and sell it today you would earn a total of 317.00 from holding O I Glass or generate 25.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 17.81% |
Values | Daily Returns |
O I Glass vs. Fuwei Films Holdings
Performance |
Timeline |
O I Glass |
Fuwei Films Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
O I and Fuwei Films Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with O I and Fuwei Films
The main advantage of trading using opposite O I and Fuwei Films positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if O I position performs unexpectedly, Fuwei Films 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 Fuwei Films will offset losses from the drop in Fuwei Films' long position.O I vs. Karat Packaging | O I vs. Reynolds Consumer Products | O I vs. Myers Industries | O I vs. Pactiv Evergreen |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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