Correlation Between ARISTOCRAT LEISURE and Fuji Media
Can any of the company-specific risk be diversified away by investing in both ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE and Fuji Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARISTOCRAT LEISURE and Fuji Media Holdings, you can compare the effects of market volatilities on ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE with a short position of Fuji Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARISTOCRAT LEISURE and Fuji Media.
Diversification Opportunities for ARISTOCRAT LEISURE and Fuji Media
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ARISTOCRAT and Fuji is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE i.e., ARISTOCRAT LEISURE and Fuji Media go up and down completely randomly.
Pair Corralation between ARISTOCRAT LEISURE and Fuji Media
Assuming the 90 days trading horizon ARISTOCRAT LEISURE is expected to generate 0.61 times more return on investment than Fuji Media. However, ARISTOCRAT LEISURE is 1.65 times less risky than Fuji Media. It trades about 0.39 of its potential returns per unit of risk. Fuji Media Holdings is currently generating about 0.05 per unit of risk. If you would invest 3,286 in ARISTOCRAT LEISURE on September 2, 2024 and sell it today you would earn a total of 874.00 from holding ARISTOCRAT LEISURE or generate 26.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ARISTOCRAT LEISURE vs. Fuji Media Holdings
Performance |
| Timeline |
| ARISTOCRAT LEISURE |
| Fuji Media Holdings |
ARISTOCRAT LEISURE and Fuji Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARISTOCRAT LEISURE and Fuji Media
The main advantage of trading using opposite ARISTOCRAT LEISURE and Fuji Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARISTOCRAT LEISURE 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.| ARISTOCRAT LEISURE vs. SIVERS SEMICONDUCTORS AB | ARISTOCRAT LEISURE vs. Darden Restaurants | ARISTOCRAT LEISURE vs. Reliance Steel Aluminum | ARISTOCRAT LEISURE vs. Q2M Managementberatung AG |
| 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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