Correlation Between Fuji Media and Cars
Can any of the company-specific risk be diversified away by investing in both Fuji Media and Cars 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 Cars 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 Cars Inc, you can compare the effects of market volatilities on Fuji Media and Cars 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 Cars. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuji Media and Cars.
Diversification Opportunities for Fuji Media and Cars
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Fuji and Cars is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Fuji Media Holdings and Cars Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cars Inc 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 Cars. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cars Inc has no effect on the direction of Fuji Media i.e., Fuji Media and Cars go up and down completely randomly.
Pair Corralation between Fuji Media and Cars
Assuming the 90 days horizon Fuji Media Holdings is expected to generate 0.79 times more return on investment than Cars. However, Fuji Media Holdings is 1.27 times less risky than Cars. It trades about 0.02 of its potential returns per unit of risk. Cars Inc is currently generating about 0.01 per unit of risk. If you would invest 975.00 in Fuji Media Holdings on September 12, 2024 and sell it today you would earn a total of 105.00 from holding Fuji Media Holdings or generate 10.77% 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. Cars Inc
Performance |
| Timeline |
| Fuji Media Holdings |
| Cars Inc |
Fuji Media and Cars Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuji Media and Cars
The main advantage of trading using opposite Fuji Media and Cars positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuji Media position performs unexpectedly, Cars 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 Cars will offset losses from the drop in Cars' long position.| Fuji Media vs. Corporate Office Properties | Fuji Media vs. Japan Asia Investment | Fuji Media vs. Virtus Investment Partners | Fuji Media vs. ECHO INVESTMENT ZY |
| Cars vs. Superior Plus Corp | Cars vs. SIVERS SEMICONDUCTORS AB | Cars vs. Norsk Hydro ASA | Cars vs. Reliance Steel Aluminum |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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