Correlation Between Fuji Electric and Signify NV
Can any of the company-specific risk be diversified away by investing in both Fuji Electric and Signify NV 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 Signify NV 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 Signify NV, you can compare the effects of market volatilities on Fuji Electric and Signify NV 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 Signify NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuji Electric and Signify NV.
Diversification Opportunities for Fuji Electric and Signify NV
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fuji and Signify is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Fuji Electric Co and Signify NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Signify NV 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 Signify NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Signify NV has no effect on the direction of Fuji Electric i.e., Fuji Electric and Signify NV go up and down completely randomly.
Pair Corralation between Fuji Electric and Signify NV
Assuming the 90 days horizon Fuji Electric Co is expected to generate 0.49 times more return on investment than Signify NV. However, Fuji Electric Co is 2.03 times less risky than Signify NV. It trades about 0.05 of its potential returns per unit of risk. Signify NV is currently generating about 0.0 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 Against |
| Strength | Insignificant |
| Accuracy | 80.67% |
| Values | Daily Returns |
Fuji Electric Co vs. Signify NV
Performance |
| Timeline |
| Fuji Electric |
| Signify NV |
Fuji Electric and Signify NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuji Electric and Signify NV
The main advantage of trading using opposite Fuji Electric and Signify NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuji Electric position performs unexpectedly, Signify NV 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 Signify NV will offset losses from the drop in Signify NV'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 |
| Signify NV vs. FREYR Battery SA | Signify NV vs. nVent Electric PLC | Signify NV vs. Hubbell | Signify NV 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 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.
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