Correlation Between AFC Energy and Fuji Electric
Can any of the company-specific risk be diversified away by investing in both AFC Energy and Fuji Electric 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 AFC Energy and Fuji Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AFC Energy plc and Fuji Electric Co, you can compare the effects of market volatilities on AFC Energy and Fuji Electric 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 AFC Energy with a short position of Fuji Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of AFC Energy and Fuji Electric.
Diversification Opportunities for AFC Energy and Fuji Electric
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AFC and Fuji is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding AFC Energy plc and Fuji Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuji Electric and AFC Energy 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 AFC Energy plc are associated (or correlated) with Fuji Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuji Electric has no effect on the direction of AFC Energy i.e., AFC Energy and Fuji Electric go up and down completely randomly.
Pair Corralation between AFC Energy and Fuji Electric
Assuming the 90 days horizon AFC Energy plc is expected to under-perform the Fuji Electric. In addition to that, AFC Energy is 2.17 times more volatile than Fuji Electric Co. It trades about -0.02 of its total potential returns per unit of risk. Fuji Electric Co is currently generating about 0.02 per unit of volatility. If you would invest 960.00 in Fuji Electric Co on January 12, 2025 and sell it today you would earn a total of 86.00 from holding Fuji Electric Co or generate 8.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
AFC Energy plc vs. Fuji Electric Co
Performance |
| Timeline |
| AFC Energy plc |
| Fuji Electric |
AFC Energy and Fuji Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AFC Energy and Fuji Electric
The main advantage of trading using opposite AFC Energy and Fuji Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AFC Energy position performs unexpectedly, Fuji Electric 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 Electric will offset losses from the drop in Fuji Electric's long position.| AFC Energy vs. Legrand SA ADR | AFC Energy vs. Loop Energy | AFC Energy vs. Sunrise New Energy | AFC Energy vs. Alfen NV |
| Fuji Electric vs. Novonix Ltd ADR | Fuji Electric vs. Magnis Energy Technologies | Fuji Electric vs. Ilika plc | Fuji Electric vs. FuelPositive Corp |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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