Correlation Between Consolidated Communications and FUJITSU
Can any of the company-specific risk be diversified away by investing in both Consolidated Communications and FUJITSU 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 Consolidated Communications and FUJITSU into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consolidated Communications Holdings and FUJITSU LTD ADR, you can compare the effects of market volatilities on Consolidated Communications and FUJITSU 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 Consolidated Communications with a short position of FUJITSU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consolidated Communications and FUJITSU.
Diversification Opportunities for Consolidated Communications and FUJITSU
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Consolidated and FUJITSU is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Consolidated Communications Ho and FUJITSU LTD ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUJITSU LTD ADR and Consolidated Communications 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 Consolidated Communications Holdings are associated (or correlated) with FUJITSU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUJITSU LTD ADR has no effect on the direction of Consolidated Communications i.e., Consolidated Communications and FUJITSU go up and down completely randomly.
Pair Corralation between Consolidated Communications and FUJITSU
Assuming the 90 days horizon Consolidated Communications is expected to generate 1.65 times less return on investment than FUJITSU. In addition to that, Consolidated Communications is 1.45 times more volatile than FUJITSU LTD ADR. It trades about 0.02 of its total potential returns per unit of risk. FUJITSU LTD ADR is currently generating about 0.05 per unit of volatility. If you would invest 1,176 in FUJITSU LTD ADR on September 3, 2024 and sell it today you would earn a total of 604.00 from holding FUJITSU LTD ADR or generate 51.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Consolidated Communications Ho vs. FUJITSU LTD ADR
Performance |
| Timeline |
| Consolidated Communications |
| FUJITSU LTD ADR |
Consolidated Communications and FUJITSU Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Consolidated Communications and FUJITSU
The main advantage of trading using opposite Consolidated Communications and FUJITSU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consolidated Communications position performs unexpectedly, FUJITSU 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 FUJITSU will offset losses from the drop in FUJITSU's long position.The idea behind Consolidated Communications Holdings and FUJITSU LTD ADR 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.
| FUJITSU vs. Eidesvik Offshore ASA | FUJITSU vs. Singapore Telecommunications Limited | FUJITSU vs. Consolidated Communications Holdings | FUJITSU vs. Iridium Communications |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |