Correlation Between Fluor and MISUMI
Can any of the company-specific risk be diversified away by investing in both Fluor and MISUMI 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 Fluor and MISUMI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fluor and MISUMI Group, you can compare the effects of market volatilities on Fluor and MISUMI 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 Fluor with a short position of MISUMI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fluor and MISUMI.
Diversification Opportunities for Fluor and MISUMI
Pay attention - limited upside
The 3 months correlation between Fluor and MISUMI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fluor and MISUMI Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MISUMI Group and Fluor 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 Fluor are associated (or correlated) with MISUMI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MISUMI Group has no effect on the direction of Fluor i.e., Fluor and MISUMI go up and down completely randomly.
Pair Corralation between Fluor and MISUMI
Considering the 90-day investment horizon Fluor is expected to generate 2.16 times more return on investment than MISUMI. However, Fluor is 2.16 times more volatile than MISUMI Group. It trades about 0.08 of its potential returns per unit of risk. MISUMI Group is currently generating about 0.08 per unit of risk. If you would invest 3,825 in Fluor on September 3, 2024 and sell it today you would earn a total of 1,788 from holding Fluor or generate 46.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 76.75% |
| Values | Daily Returns |
Fluor vs. MISUMI Group
Performance |
| Timeline |
| Fluor |
| MISUMI Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fluor and MISUMI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fluor and MISUMI
The main advantage of trading using opposite Fluor and MISUMI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fluor position performs unexpectedly, MISUMI 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 MISUMI will offset losses from the drop in MISUMI's long position.The idea behind Fluor and MISUMI Group 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.| MISUMI vs. Eastern Co | MISUMI vs. Hillman Solutions Corp | MISUMI vs. Techtronic Industries Ltd | MISUMI vs. Husqvarna AB |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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