Correlation Between Daifuku and Fanuc
Can any of the company-specific risk be diversified away by investing in both Daifuku and Fanuc 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 Daifuku and Fanuc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daifuku Co and Fanuc, you can compare the effects of market volatilities on Daifuku and Fanuc 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 Daifuku with a short position of Fanuc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daifuku and Fanuc.
Diversification Opportunities for Daifuku and Fanuc
Very good diversification
The 3 months correlation between Daifuku and Fanuc is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Daifuku Co and Fanuc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fanuc and Daifuku 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 Daifuku Co are associated (or correlated) with Fanuc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fanuc has no effect on the direction of Daifuku i.e., Daifuku and Fanuc go up and down completely randomly.
Pair Corralation between Daifuku and Fanuc
Assuming the 90 days horizon Daifuku is expected to generate 2.59 times less return on investment than Fanuc. But when comparing it to its historical volatility, Daifuku Co is 1.11 times less risky than Fanuc. It trades about 0.07 of its potential returns per unit of risk. Fanuc is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 2,719 in Fanuc on August 25, 2024 and sell it today you would lose (14.00) from holding Fanuc or give up 0.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 44.01% |
| Values | Daily Returns |
Daifuku Co vs. Fanuc
Performance |
| Timeline |
| Daifuku |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Fanuc |
Daifuku and Fanuc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daifuku and Fanuc
The main advantage of trading using opposite Daifuku and Fanuc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daifuku position performs unexpectedly, Fanuc 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 Fanuc will offset losses from the drop in Fanuc's long position.The idea behind Daifuku Co and Fanuc 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.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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Stocks Directory Find actively traded stocks across global markets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |