Correlation Between Fuwei Films and Packaging Corp
Can any of the company-specific risk be diversified away by investing in both Fuwei Films and Packaging Corp 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 Fuwei Films and Packaging Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fuwei Films Holdings and Packaging Corp of, you can compare the effects of market volatilities on Fuwei Films and Packaging Corp 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 Fuwei Films with a short position of Packaging Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuwei Films and Packaging Corp.
Diversification Opportunities for Fuwei Films and Packaging Corp
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fuwei and Packaging is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Fuwei Films Holdings and Packaging Corp of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Packaging Corp and Fuwei Films 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 Fuwei Films Holdings are associated (or correlated) with Packaging Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Packaging Corp has no effect on the direction of Fuwei Films i.e., Fuwei Films and Packaging Corp go up and down completely randomly.
Pair Corralation between Fuwei Films and Packaging Corp
Given the investment horizon of 90 days Fuwei Films Holdings is expected to generate 3.04 times more return on investment than Packaging Corp. However, Fuwei Films is 3.04 times more volatile than Packaging Corp of. It trades about 0.09 of its potential returns per unit of risk. Packaging Corp of is currently generating about 0.05 per unit of risk. If you would invest 546.00 in Fuwei Films Holdings on January 25, 2024 and sell it today you would earn a total of 302.00 from holding Fuwei Films Holdings or generate 55.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 28.13% |
| Values | Daily Returns |
Fuwei Films Holdings vs. Packaging Corp of
Performance |
| Timeline |
| Fuwei Films Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Packaging Corp |
Fuwei Films and Packaging Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuwei Films and Packaging Corp
The main advantage of trading using opposite Fuwei Films and Packaging Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuwei Films position performs unexpectedly, Packaging Corp 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 Packaging Corp will offset losses from the drop in Packaging Corp's long position.| Fuwei Films vs. Boston Beer | Fuwei Films vs. Marfrig Global Foods | Fuwei Films vs. Vita Coco | Fuwei Films vs. National Beverage Corp |
| Packaging Corp vs. Pactiv Evergreen | Packaging Corp vs. Myers Industries | Packaging Corp vs. Avery Dennison Corp | Packaging Corp vs. Karat Packaging |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |