Correlation Between FREYR Battery and Fuji Electric
Can any of the company-specific risk be diversified away by investing in both FREYR Battery and Fuji Electric 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 FREYR Battery and Fuji Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FREYR Battery SA and Fuji Electric Co, you can compare the effects of market volatilities on FREYR Battery and Fuji Electric 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 FREYR Battery with a short position of Fuji Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of FREYR Battery and Fuji Electric.
Diversification Opportunities for FREYR Battery and Fuji Electric
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between FREYR and Fuji is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding FREYR Battery SA and Fuji Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuji Electric and FREYR Battery 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 FREYR Battery SA are associated (or correlated) with Fuji Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuji Electric has no effect on the direction of FREYR Battery i.e., FREYR Battery and Fuji Electric go up and down completely randomly.
Pair Corralation between FREYR Battery and Fuji Electric
Given the investment horizon of 90 days FREYR Battery SA is expected to generate 10.66 times more return on investment than Fuji Electric. However, FREYR Battery is 10.66 times more volatile than Fuji Electric Co. It trades about 0.31 of its potential returns per unit of risk. Fuji Electric Co is currently generating about 0.23 per unit of risk. If you would invest 101.00 in FREYR Battery SA on August 25, 2024 and sell it today you would earn a total of 144.00 from holding FREYR Battery SA or generate 142.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FREYR Battery SA vs. Fuji Electric Co
Performance |
| Timeline |
| FREYR Battery SA |
| Fuji Electric |
FREYR Battery and Fuji Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FREYR Battery and Fuji Electric
The main advantage of trading using opposite FREYR Battery and Fuji Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FREYR Battery position performs unexpectedly, Fuji Electric 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 Fuji Electric will offset losses from the drop in Fuji Electric's long position.| FREYR Battery vs. Solid Power | FREYR Battery vs. Enovix Corp | FREYR Battery vs. Microvast Holdings | FREYR Battery vs. LiCycle Holdings Corp |
| Fuji Electric vs. FREYR Battery SA | Fuji Electric vs. nVent Electric PLC | Fuji Electric vs. Hubbell | Fuji Electric 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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