Correlation Between FUJITSU and CDW
Can any of the company-specific risk be diversified away by investing in both FUJITSU and CDW 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 CDW 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 CDW Corporation, you can compare the effects of market volatilities on FUJITSU and CDW 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 CDW. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUJITSU and CDW.
Diversification Opportunities for FUJITSU and CDW
Poor diversification
The 3 months correlation between FUJITSU and CDW is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding FUJITSU LTD ADR and CDW Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDW Corporation 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 CDW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDW Corporation has no effect on the direction of FUJITSU i.e., FUJITSU and CDW go up and down completely randomly.
Pair Corralation between FUJITSU and CDW
Assuming the 90 days trading horizon FUJITSU LTD ADR is expected to generate 1.28 times more return on investment than CDW. However, FUJITSU is 1.28 times more volatile than CDW Corporation. It trades about 0.1 of its potential returns per unit of risk. CDW Corporation is currently generating about -0.07 per unit of risk. If you would invest 1,330 in FUJITSU LTD ADR on September 2, 2024 and sell it today you would earn a total of 450.00 from holding FUJITSU LTD ADR or generate 33.83% 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. CDW Corp.
Performance |
| Timeline |
| FUJITSU LTD ADR |
| CDW Corporation |
FUJITSU and CDW Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUJITSU and CDW
The main advantage of trading using opposite FUJITSU and CDW positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUJITSU position performs unexpectedly, CDW 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 CDW will offset losses from the drop in CDW's long position.| FUJITSU vs. Verizon Communications | FUJITSU vs. Gamma Communications plc | FUJITSU vs. Charter Communications | FUJITSU vs. Entravision Communications |
| CDW vs. Superior Plus Corp | CDW vs. NMI Holdings | CDW vs. Origin Agritech | CDW vs. SIVERS SEMICONDUCTORS AB |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |