Correlation Between Panasonic Corp and Freeport McMoRan
Can any of the company-specific risk be diversified away by investing in both Panasonic Corp and Freeport McMoRan 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 Panasonic Corp and Freeport McMoRan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Panasonic Corp and Freeport McMoRan, you can compare the effects of market volatilities on Panasonic Corp and Freeport McMoRan 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 Panasonic Corp with a short position of Freeport McMoRan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panasonic Corp and Freeport McMoRan.
Diversification Opportunities for Panasonic Corp and Freeport McMoRan
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Panasonic and Freeport is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Panasonic Corp and Freeport McMoRan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freeport McMoRan and Panasonic Corp 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 Panasonic Corp are associated (or correlated) with Freeport McMoRan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freeport McMoRan has no effect on the direction of Panasonic Corp i.e., Panasonic Corp and Freeport McMoRan go up and down completely randomly.
Pair Corralation between Panasonic Corp and Freeport McMoRan
Assuming the 90 days trading horizon Panasonic Corp is expected to generate 0.88 times more return on investment than Freeport McMoRan. However, Panasonic Corp is 1.14 times less risky than Freeport McMoRan. It trades about 0.03 of its potential returns per unit of risk. Freeport McMoRan is currently generating about -0.19 per unit of risk. If you would invest 153,600 in Panasonic Corp on October 26, 2024 and sell it today you would earn a total of 1,200 from holding Panasonic Corp or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 51.22% |
| Values | Daily Returns |
Panasonic Corp vs. Freeport McMoRan
Performance |
| Timeline |
| Panasonic Corp |
| Freeport McMoRan |
Panasonic Corp and Freeport McMoRan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Panasonic Corp and Freeport McMoRan
The main advantage of trading using opposite Panasonic Corp and Freeport McMoRan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Panasonic Corp position performs unexpectedly, Freeport McMoRan 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 Freeport McMoRan will offset losses from the drop in Freeport McMoRan's long position.| Panasonic Corp vs. Jacquet Metal Service | Panasonic Corp vs. Bisichi Mining PLC | Panasonic Corp vs. Aeorema Communications Plc | Panasonic Corp vs. Batm Advanced Communications |
| Freeport McMoRan vs. Spirent Communications plc | Freeport McMoRan vs. LPKF Laser Electronics | Freeport McMoRan vs. Compagnie Plastic Omnium | Freeport McMoRan vs. Samsung Electronics Co |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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