Correlation Between Fuji Electric and Legrand SA
Can any of the company-specific risk be diversified away by investing in both Fuji Electric and Legrand SA 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 Fuji Electric and Legrand SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fuji Electric Co and Legrand SA ADR, you can compare the effects of market volatilities on Fuji Electric and Legrand SA 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 Fuji Electric with a short position of Legrand SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuji Electric and Legrand SA.
Diversification Opportunities for Fuji Electric and Legrand SA
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Fuji and Legrand is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Fuji Electric Co and Legrand SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legrand SA ADR and Fuji Electric 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 Fuji Electric Co are associated (or correlated) with Legrand SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legrand SA ADR has no effect on the direction of Fuji Electric i.e., Fuji Electric and Legrand SA go up and down completely randomly.
Pair Corralation between Fuji Electric and Legrand SA
Assuming the 90 days horizon Fuji Electric Co is expected to generate 1.59 times more return on investment than Legrand SA. However, Fuji Electric is 1.59 times more volatile than Legrand SA ADR. It trades about 0.05 of its potential returns per unit of risk. Legrand SA ADR is currently generating about 0.04 per unit of risk. If you would invest 958.00 in Fuji Electric Co on August 28, 2024 and sell it today you would earn a total of 452.00 from holding Fuji Electric Co or generate 47.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Fuji Electric Co vs. Legrand SA ADR
Performance |
| Timeline |
| Fuji Electric |
| Legrand SA ADR |
Fuji Electric and Legrand SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuji Electric and Legrand SA
The main advantage of trading using opposite Fuji Electric and Legrand SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuji Electric position performs unexpectedly, Legrand SA 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 Legrand SA will offset losses from the drop in Legrand SA's long position.| Fuji Electric vs. FREYR Battery SA | Fuji Electric vs. nVent Electric PLC | Fuji Electric vs. Hubbell | Fuji Electric vs. Advanced Energy Industries |
| Legrand SA vs. FREYR Battery SA | Legrand SA vs. nVent Electric PLC | Legrand SA vs. Hubbell | Legrand SA vs. Advanced Energy Industries |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |