Correlation Between Fuji Media and REMEDY ENTERTAINMENT

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Can any of the company-specific risk be diversified away by investing in both Fuji Media and REMEDY ENTERTAINMENT 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 REMEDY ENTERTAINMENT 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 REMEDY ENTERTAINMENT OYJ, you can compare the effects of market volatilities on Fuji Media and REMEDY ENTERTAINMENT 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 REMEDY ENTERTAINMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuji Media and REMEDY ENTERTAINMENT.

Diversification Opportunities for Fuji Media and REMEDY ENTERTAINMENT

0.43
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Fuji and REMEDY is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Fuji Media Holdings and REMEDY ENTERTAINMENT OYJ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REMEDY ENTERTAINMENT OYJ 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 REMEDY ENTERTAINMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REMEDY ENTERTAINMENT OYJ has no effect on the direction of Fuji Media i.e., Fuji Media and REMEDY ENTERTAINMENT go up and down completely randomly.

Pair Corralation between Fuji Media and REMEDY ENTERTAINMENT

Assuming the 90 days horizon Fuji Media Holdings is expected to generate 0.82 times more return on investment than REMEDY ENTERTAINMENT. However, Fuji Media Holdings is 1.21 times less risky than REMEDY ENTERTAINMENT. It trades about 0.05 of its potential returns per unit of risk. REMEDY ENTERTAINMENT OYJ is currently generating about -0.02 per unit of risk. If you would invest  740.00  in Fuji Media Holdings on September 13, 2024 and sell it today you would earn a total of  330.00  from holding Fuji Media Holdings or generate 44.59% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Fuji Media Holdings  vs.  REMEDY ENTERTAINMENT OYJ

 Performance 
       Timeline  
Fuji Media Holdings 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Fuji Media Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Fuji Media is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.
REMEDY ENTERTAINMENT OYJ 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days REMEDY ENTERTAINMENT OYJ has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Fuji Media and REMEDY ENTERTAINMENT Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Fuji Media and REMEDY ENTERTAINMENT

The main advantage of trading using opposite Fuji Media and REMEDY ENTERTAINMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuji Media position performs unexpectedly, REMEDY ENTERTAINMENT 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 REMEDY ENTERTAINMENT will offset losses from the drop in REMEDY ENTERTAINMENT's long position.
The idea behind Fuji Media Holdings and REMEDY ENTERTAINMENT OYJ pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.

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