Correlation Between Fuji Media and BII Railway
Can any of the company-specific risk be diversified away by investing in both Fuji Media and BII Railway 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 Media and BII Railway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fuji Media Holdings and BII Railway Transportation, you can compare the effects of market volatilities on Fuji Media and BII Railway 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 Media with a short position of BII Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuji Media and BII Railway.
Diversification Opportunities for Fuji Media and BII Railway
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fuji and BII is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Fuji Media Holdings and BII Railway Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BII Railway Transpor and Fuji Media 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 Media Holdings are associated (or correlated) with BII Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BII Railway Transpor has no effect on the direction of Fuji Media i.e., Fuji Media and BII Railway go up and down completely randomly.
Pair Corralation between Fuji Media and BII Railway
Assuming the 90 days trading horizon Fuji Media is expected to generate 2.03 times less return on investment than BII Railway. But when comparing it to its historical volatility, Fuji Media Holdings is 2.03 times less risky than BII Railway. It trades about 0.02 of its potential returns per unit of risk. BII Railway Transportation is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2.65 in BII Railway Transportation on October 16, 2024 and sell it today you would earn a total of 0.10 from holding BII Railway Transportation or generate 3.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fuji Media Holdings vs. BII Railway Transportation
Performance |
| Timeline |
| Fuji Media Holdings |
| BII Railway Transpor |
Fuji Media and BII Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuji Media and BII Railway
The main advantage of trading using opposite Fuji Media and BII Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuji Media position performs unexpectedly, BII Railway 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 BII Railway will offset losses from the drop in BII Railway's long position.| Fuji Media vs. COLUMBIA SPORTSWEAR | Fuji Media vs. PEPTONIC MEDICAL | Fuji Media vs. ePlay Digital | Fuji Media vs. ONWARD MEDICAL BV |
| BII Railway vs. PENN Entertainment | BII Railway vs. Cleanaway Waste Management | BII Railway vs. CNVISION MEDIA | BII Railway vs. Fuji Media Holdings |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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