Correlation Between FUJITSU and Bechtle AG
Can any of the company-specific risk be diversified away by investing in both FUJITSU and Bechtle AG 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 Bechtle AG 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 Bechtle AG, you can compare the effects of market volatilities on FUJITSU and Bechtle AG 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 Bechtle AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUJITSU and Bechtle AG.
Diversification Opportunities for FUJITSU and Bechtle AG
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FUJITSU and Bechtle is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding FUJITSU LTD ADR and Bechtle AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bechtle AG 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 Bechtle AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bechtle AG has no effect on the direction of FUJITSU i.e., FUJITSU and Bechtle AG go up and down completely randomly.
Pair Corralation between FUJITSU and Bechtle AG
Assuming the 90 days trading horizon FUJITSU LTD ADR is expected to generate 1.44 times more return on investment than Bechtle AG. However, FUJITSU is 1.44 times more volatile than Bechtle AG. It trades about 0.07 of its potential returns per unit of risk. Bechtle AG is currently generating about -0.17 per unit of risk. If you would invest 1,430 in FUJITSU LTD ADR on September 3, 2024 and sell it today you would earn a total of 350.00 from holding FUJITSU LTD ADR or generate 24.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FUJITSU LTD ADR vs. Bechtle AG
Performance |
| Timeline |
| FUJITSU LTD ADR |
| Bechtle AG |
FUJITSU and Bechtle AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUJITSU and Bechtle AG
The main advantage of trading using opposite FUJITSU and Bechtle AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUJITSU position performs unexpectedly, Bechtle AG 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 Bechtle AG will offset losses from the drop in Bechtle AG's long position.| FUJITSU vs. Eidesvik Offshore ASA | FUJITSU vs. Singapore Telecommunications Limited | FUJITSU vs. Consolidated Communications Holdings | FUJITSU vs. Iridium Communications |
| Bechtle AG vs. Check Point Software | Bechtle AG vs. ATOSS SOFTWARE | Bechtle AG vs. FAST RETAIL ADR | Bechtle AG vs. Ultra Clean Holdings |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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