Correlation Between Fuji Media and NH HOTEL
Can any of the company-specific risk be diversified away by investing in both Fuji Media and NH HOTEL 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 NH HOTEL 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 NH HOTEL GROUP, you can compare the effects of market volatilities on Fuji Media and NH HOTEL 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 NH HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuji Media and NH HOTEL.
Diversification Opportunities for Fuji Media and NH HOTEL
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fuji and NH5 is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Fuji Media Holdings and NH HOTEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH HOTEL GROUP 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 NH HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH HOTEL GROUP has no effect on the direction of Fuji Media i.e., Fuji Media and NH HOTEL go up and down completely randomly.
Pair Corralation between Fuji Media and NH HOTEL
Assuming the 90 days trading horizon Fuji Media Holdings is expected to generate 6.81 times more return on investment than NH HOTEL. However, Fuji Media is 6.81 times more volatile than NH HOTEL GROUP. It trades about 0.23 of its potential returns per unit of risk. NH HOTEL GROUP is currently generating about -0.11 per unit of risk. If you would invest 1,030 in Fuji Media Holdings on October 30, 2024 and sell it today you would earn a total of 160.00 from holding Fuji Media Holdings or generate 15.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fuji Media Holdings vs. NH HOTEL GROUP
Performance |
| Timeline |
| Fuji Media Holdings |
| NH HOTEL GROUP |
Fuji Media and NH HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuji Media and NH HOTEL
The main advantage of trading using opposite Fuji Media and NH HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuji Media position performs unexpectedly, NH HOTEL 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 NH HOTEL will offset losses from the drop in NH HOTEL's long position.| Fuji Media vs. AOI Electronics Co | Fuji Media vs. Zijin Mining Group | Fuji Media vs. ARROW ELECTRONICS | Fuji Media vs. Arrow Electronics |
| NH HOTEL vs. China Eastern Airlines | NH HOTEL vs. PLAYMATES TOYS | NH HOTEL vs. FRACTAL GAMING GROUP | NH HOTEL vs. GameStop 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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