Correlation Between Fuji Media and Sekisui Chemical
Can any of the company-specific risk be diversified away by investing in both Fuji Media and Sekisui Chemical 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 Sekisui Chemical 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 Sekisui Chemical Co, you can compare the effects of market volatilities on Fuji Media and Sekisui Chemical 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 Sekisui Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuji Media and Sekisui Chemical.
Diversification Opportunities for Fuji Media and Sekisui Chemical
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fuji and Sekisui is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Fuji Media Holdings and Sekisui Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sekisui Chemical 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 Sekisui Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sekisui Chemical has no effect on the direction of Fuji Media i.e., Fuji Media and Sekisui Chemical go up and down completely randomly.
Pair Corralation between Fuji Media and Sekisui Chemical
Assuming the 90 days trading horizon Fuji Media Holdings is expected to under-perform the Sekisui Chemical. But the stock apears to be less risky and, when comparing its historical volatility, Fuji Media Holdings is 1.34 times less risky than Sekisui Chemical. The stock trades about -0.25 of its potential returns per unit of risk. The Sekisui Chemical Co is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,480 in Sekisui Chemical Co on October 12, 2024 and sell it today you would earn a total of 130.00 from holding Sekisui Chemical Co or generate 8.78% 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. Sekisui Chemical Co
Performance |
| Timeline |
| Fuji Media Holdings |
| Sekisui Chemical |
Fuji Media and Sekisui Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuji Media and Sekisui Chemical
The main advantage of trading using opposite Fuji Media and Sekisui Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuji Media position performs unexpectedly, Sekisui Chemical 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 Sekisui Chemical will offset losses from the drop in Sekisui Chemical's long position.| Fuji Media vs. Commonwealth Bank of | Fuji Media vs. Virtu Financial | Fuji Media vs. Corsair Gaming | Fuji Media vs. Westinghouse Air Brake |
| Sekisui Chemical vs. SEKISUI CHEMICAL | Sekisui Chemical vs. BJs Restaurants | Sekisui Chemical vs. X FAB Silicon Foundries | Sekisui Chemical vs. SWISS WATER DECAFFCOFFEE |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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