Correlation Between FUJITSU and Computer
Can any of the company-specific risk be diversified away by investing in both FUJITSU and Computer 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 Computer 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 Computer And Technologies, you can compare the effects of market volatilities on FUJITSU and Computer 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 Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUJITSU and Computer.
Diversification Opportunities for FUJITSU and Computer
Poor diversification
The 3 months correlation between FUJITSU and Computer is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding FUJITSU LTD ADR and Computer And Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer And Technologies 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 Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer And Technologies has no effect on the direction of FUJITSU i.e., FUJITSU and Computer go up and down completely randomly.
Pair Corralation between FUJITSU and Computer
Assuming the 90 days trading horizon FUJITSU LTD ADR is expected to generate 1.27 times more return on investment than Computer. However, FUJITSU is 1.27 times more volatile than Computer And Technologies. It trades about -0.13 of its potential returns per unit of risk. Computer And Technologies is currently generating about -0.21 per unit of risk. If you would invest 1,790 in FUJITSU LTD ADR on August 24, 2024 and sell it today you would lose (140.00) from holding FUJITSU LTD ADR or give up 7.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FUJITSU LTD ADR vs. Computer And Technologies
Performance |
| Timeline |
| FUJITSU LTD ADR |
| Computer And Technologies |
FUJITSU and Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUJITSU and Computer
The main advantage of trading using opposite FUJITSU and Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUJITSU position performs unexpectedly, Computer 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 Computer will offset losses from the drop in Computer's long position.| FUJITSU vs. Western Copper and | FUJITSU vs. ADRIATIC METALS LS 013355 | FUJITSU vs. GALENA MINING LTD | FUJITSU vs. AUTO TRADER ADR |
| Computer vs. Origin Agritech | Computer vs. SIVERS SEMICONDUCTORS AB | Computer vs. Talanx AG | Computer vs. NorAm Drilling AS |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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