Correlation Between Fuji Media and UNITED UTILITIES
Can any of the company-specific risk be diversified away by investing in both Fuji Media and UNITED UTILITIES 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 UNITED UTILITIES 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 UNITED UTILITIES GR, you can compare the effects of market volatilities on Fuji Media and UNITED UTILITIES 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 UNITED UTILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuji Media and UNITED UTILITIES.
Diversification Opportunities for Fuji Media and UNITED UTILITIES
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fuji and UNITED is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Fuji Media Holdings and UNITED UTILITIES GR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITED UTILITIES 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 UNITED UTILITIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNITED UTILITIES has no effect on the direction of Fuji Media i.e., Fuji Media and UNITED UTILITIES go up and down completely randomly.
Pair Corralation between Fuji Media and UNITED UTILITIES
Assuming the 90 days trading horizon Fuji Media Holdings is expected to generate 2.01 times more return on investment than UNITED UTILITIES. However, Fuji Media is 2.01 times more volatile than UNITED UTILITIES GR. It trades about 0.33 of its potential returns per unit of risk. UNITED UTILITIES GR is currently generating about -0.04 per unit of risk. If you would invest 1,030 in Fuji Media Holdings on November 7, 2024 and sell it today you would earn a total of 310.00 from holding Fuji Media Holdings or generate 30.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Fuji Media Holdings vs. UNITED UTILITIES GR
Performance |
| Timeline |
| Fuji Media Holdings |
| UNITED UTILITIES |
Fuji Media and UNITED UTILITIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuji Media and UNITED UTILITIES
The main advantage of trading using opposite Fuji Media and UNITED UTILITIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuji Media position performs unexpectedly, UNITED UTILITIES 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 UNITED UTILITIES will offset losses from the drop in UNITED UTILITIES's long position.| Fuji Media vs. VELA TECHNOLPLC LS 0001 | Fuji Media vs. NXP Semiconductors NV | Fuji Media vs. Playtech plc | Fuji Media vs. Genscript Biotech |
| UNITED UTILITIES vs. Samsung Electronics Co | UNITED UTILITIES vs. COSTCO WHOLESALE CDR | UNITED UTILITIES vs. LG Electronics | UNITED UTILITIES vs. Nanjing Panda Electronics |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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