Correlation Between Founder Technology and Shanghai Lujiazui

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Can any of the company-specific risk be diversified away by investing in both Founder Technology and Shanghai Lujiazui 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 Founder Technology and Shanghai Lujiazui into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Founder Technology Group and Shanghai Lujiazui Finance, you can compare the effects of market volatilities on Founder Technology and Shanghai Lujiazui 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 Founder Technology with a short position of Shanghai Lujiazui. Check out your portfolio center. Please also check ongoing floating volatility patterns of Founder Technology and Shanghai Lujiazui.

Diversification Opportunities for Founder Technology and Shanghai Lujiazui

-0.49
  Correlation Coefficient

Very good diversification

The 3 months correlation between Founder and Shanghai is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Founder Technology Group and Shanghai Lujiazui Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Lujiazui Finance and Founder Technology 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 Founder Technology Group are associated (or correlated) with Shanghai Lujiazui. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Lujiazui Finance has no effect on the direction of Founder Technology i.e., Founder Technology and Shanghai Lujiazui go up and down completely randomly.

Pair Corralation between Founder Technology and Shanghai Lujiazui

Assuming the 90 days trading horizon Founder Technology Group is expected to generate 3.45 times more return on investment than Shanghai Lujiazui. However, Founder Technology is 3.45 times more volatile than Shanghai Lujiazui Finance. It trades about 0.06 of its potential returns per unit of risk. Shanghai Lujiazui Finance is currently generating about -0.18 per unit of risk. If you would invest  1,130  in Founder Technology Group on September 12, 2025 and sell it today you would earn a total of  122.00  from holding Founder Technology Group or generate 10.8% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy98.31%
ValuesDaily Returns

Founder Technology Group  vs.  Shanghai Lujiazui Finance

 Performance 
       Timeline  
Founder Technology 

Risk-Adjusted Performance

Mild

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Founder Technology Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Founder Technology sustained solid returns over the last few months and may actually be approaching a breakup point.
Shanghai Lujiazui Finance 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Shanghai Lujiazui Finance has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Founder Technology and Shanghai Lujiazui Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Founder Technology and Shanghai Lujiazui

The main advantage of trading using opposite Founder Technology and Shanghai Lujiazui positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Founder Technology position performs unexpectedly, Shanghai Lujiazui 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 Shanghai Lujiazui will offset losses from the drop in Shanghai Lujiazui's long position.
The idea behind Founder Technology Group and Shanghai Lujiazui Finance pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

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