Correlation Between FUJITSU and Amadeus IT
Can any of the company-specific risk be diversified away by investing in both FUJITSU and Amadeus IT 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 FUJITSU and Amadeus IT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FUJITSU LTD ADR and Amadeus IT Group, you can compare the effects of market volatilities on FUJITSU and Amadeus IT 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 FUJITSU with a short position of Amadeus IT. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUJITSU and Amadeus IT.
Diversification Opportunities for FUJITSU and Amadeus IT
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FUJITSU and Amadeus is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding FUJITSU LTD ADR and Amadeus IT Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amadeus IT Group and FUJITSU 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 FUJITSU LTD ADR are associated (or correlated) with Amadeus IT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amadeus IT Group has no effect on the direction of FUJITSU i.e., FUJITSU and Amadeus IT go up and down completely randomly.
Pair Corralation between FUJITSU and Amadeus IT
Assuming the 90 days trading horizon FUJITSU LTD ADR is expected to under-perform the Amadeus IT. In addition to that, FUJITSU is 2.1 times more volatile than Amadeus IT Group. It trades about -0.03 of its total potential returns per unit of risk. Amadeus IT Group is currently generating about -0.04 per unit of volatility. If you would invest 6,764 in Amadeus IT Group on September 23, 2024 and sell it today you would lose (126.00) from holding Amadeus IT Group or give up 1.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FUJITSU LTD ADR vs. Amadeus IT Group
Performance |
| Timeline |
| FUJITSU LTD ADR |
| Amadeus IT Group |
FUJITSU and Amadeus IT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUJITSU and Amadeus IT
The main advantage of trading using opposite FUJITSU and Amadeus IT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUJITSU position performs unexpectedly, Amadeus IT 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 Amadeus IT will offset losses from the drop in Amadeus IT's long position.| FUJITSU vs. Accenture plc | FUJITSU vs. International Business Machines | FUJITSU vs. Infosys Limited | FUJITSU vs. Cognizant Technology Solutions |
| Amadeus IT vs. Accenture plc | Amadeus IT vs. International Business Machines | Amadeus IT vs. Infosys Limited | Amadeus IT vs. Cognizant Technology Solutions |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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