Correlation Between FUJITSU and Accenture Plc
Can any of the company-specific risk be diversified away by investing in both FUJITSU and Accenture Plc 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 Accenture Plc 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 Accenture plc, you can compare the effects of market volatilities on FUJITSU and Accenture Plc 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 Accenture Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUJITSU and Accenture Plc.
Diversification Opportunities for FUJITSU and Accenture Plc
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FUJITSU and Accenture is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding FUJITSU LTD ADR and Accenture plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accenture plc 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 Accenture Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accenture plc has no effect on the direction of FUJITSU i.e., FUJITSU and Accenture Plc go up and down completely randomly.
Pair Corralation between FUJITSU and Accenture Plc
Assuming the 90 days trading horizon FUJITSU LTD ADR is expected to under-perform the Accenture Plc. But the stock apears to be less risky and, when comparing its historical volatility, FUJITSU LTD ADR is 1.19 times less risky than Accenture Plc. The stock trades about -0.02 of its potential returns per unit of risk. The Accenture plc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 34,300 in Accenture plc on October 26, 2024 and sell it today you would earn a total of 405.00 from holding Accenture plc or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FUJITSU LTD ADR vs. Accenture plc
Performance |
| Timeline |
| FUJITSU LTD ADR |
| Accenture plc |
FUJITSU and Accenture Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUJITSU and Accenture Plc
The main advantage of trading using opposite FUJITSU and Accenture Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUJITSU position performs unexpectedly, Accenture Plc 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 Accenture Plc will offset losses from the drop in Accenture Plc's long position.| FUJITSU vs. American Public Education | FUJITSU vs. PTT Global Chemical | FUJITSU vs. Siamgas And Petrochemicals | FUJITSU vs. Mitsubishi Gas Chemical |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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