Correlation Between Rai Way and Fuji Media
Can any of the company-specific risk be diversified away by investing in both Rai Way and Fuji Media 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 Rai Way and Fuji Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rai Way SpA and Fuji Media Holdings, you can compare the effects of market volatilities on Rai Way and Fuji Media 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 Rai Way with a short position of Fuji Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rai Way and Fuji Media.
Diversification Opportunities for Rai Way and Fuji Media
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Rai and Fuji is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Rai Way SpA and Fuji Media Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuji Media Holdings and Rai Way 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 Rai Way SpA are associated (or correlated) with Fuji Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuji Media Holdings has no effect on the direction of Rai Way i.e., Rai Way and Fuji Media go up and down completely randomly.
Pair Corralation between Rai Way and Fuji Media
Assuming the 90 days horizon Rai Way SpA is expected to under-perform the Fuji Media. But the stock apears to be less risky and, when comparing its historical volatility, Rai Way SpA is 1.44 times less risky than Fuji Media. The stock trades about -0.07 of its potential returns per unit of risk. The Fuji Media Holdings is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,020 in Fuji Media Holdings on September 2, 2024 and sell it today you would earn a total of 50.00 from holding Fuji Media Holdings or generate 4.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rai Way SpA vs. Fuji Media Holdings
Performance |
| Timeline |
| Rai Way SpA |
| Fuji Media Holdings |
Rai Way and Fuji Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rai Way and Fuji Media
The main advantage of trading using opposite Rai Way and Fuji Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rai Way position performs unexpectedly, Fuji Media 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 Fuji Media will offset losses from the drop in Fuji Media's long position.| Rai Way vs. Singapore Airlines Limited | Rai Way vs. NAKED WINES PLC | Rai Way vs. IMAGIN MEDICAL INC | Rai Way vs. International Consolidated Airlines |
| Fuji Media vs. Rai Way SpA | Fuji Media vs. Superior Plus Corp | Fuji Media vs. NMI Holdings | Fuji Media vs. Origin Agritech |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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