Correlation Between Fosun International and ITOCHU
Can any of the company-specific risk be diversified away by investing in both Fosun International and ITOCHU 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 Fosun International and ITOCHU into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fosun International and ITOCHU, you can compare the effects of market volatilities on Fosun International and ITOCHU 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 Fosun International with a short position of ITOCHU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fosun International and ITOCHU.
Diversification Opportunities for Fosun International and ITOCHU
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fosun and ITOCHU is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fosun International and ITOCHU in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITOCHU and Fosun International 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 Fosun International are associated (or correlated) with ITOCHU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITOCHU has no effect on the direction of Fosun International i.e., Fosun International and ITOCHU go up and down completely randomly.
Pair Corralation between Fosun International and ITOCHU
Assuming the 90 days horizon Fosun International is expected to under-perform the ITOCHU. But the pink sheet apears to be less risky and, when comparing its historical volatility, Fosun International is 2.06 times less risky than ITOCHU. The pink sheet trades about -0.18 of its potential returns per unit of risk. The ITOCHU is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4,813 in ITOCHU on September 1, 2024 and sell it today you would earn a total of 287.00 from holding ITOCHU or generate 5.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fosun International vs. ITOCHU
Performance |
| Timeline |
| Fosun International |
| ITOCHU |
Fosun International and ITOCHU Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fosun International and ITOCHU
The main advantage of trading using opposite Fosun International and ITOCHU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fosun International position performs unexpectedly, ITOCHU 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 ITOCHU will offset losses from the drop in ITOCHU's long position.| Fosun International vs. Global Tech Industries | Fosun International vs. NN Inc | Fosun International vs. National Health Scan | Fosun International vs. RCABS Inc |
| ITOCHU vs. Sumitomo Corp ADR | ITOCHU vs. Mitsui Co | ITOCHU vs. Marubeni Corp ADR | ITOCHU vs. Mitsubishi Corp |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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