Correlation Between FUJIFILM Holdings and Swire Pacific
Can any of the company-specific risk be diversified away by investing in both FUJIFILM Holdings and Swire Pacific 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 FUJIFILM Holdings and Swire Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FUJIFILM Holdings Corp and Swire Pacific, you can compare the effects of market volatilities on FUJIFILM Holdings and Swire Pacific 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 FUJIFILM Holdings with a short position of Swire Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUJIFILM Holdings and Swire Pacific.
Diversification Opportunities for FUJIFILM Holdings and Swire Pacific
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FUJIFILM and Swire is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding FUJIFILM Holdings Corp and Swire Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swire Pacific and FUJIFILM Holdings 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 FUJIFILM Holdings Corp are associated (or correlated) with Swire Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swire Pacific has no effect on the direction of FUJIFILM Holdings i.e., FUJIFILM Holdings and Swire Pacific go up and down completely randomly.
Pair Corralation between FUJIFILM Holdings and Swire Pacific
Assuming the 90 days horizon FUJIFILM Holdings Corp is expected to under-perform the Swire Pacific. But the pink sheet apears to be less risky and, when comparing its historical volatility, FUJIFILM Holdings Corp is 1.51 times less risky than Swire Pacific. The pink sheet trades about -0.17 of its potential returns per unit of risk. The Swire Pacific is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 566.00 in Swire Pacific on August 27, 2024 and sell it today you would earn a total of 254.00 from holding Swire Pacific or generate 44.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 9.12% |
| Values | Daily Returns |
FUJIFILM Holdings Corp vs. Swire Pacific
Performance |
| Timeline |
| FUJIFILM Holdings Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Swire Pacific |
FUJIFILM Holdings and Swire Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUJIFILM Holdings and Swire Pacific
The main advantage of trading using opposite FUJIFILM Holdings and Swire Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUJIFILM Holdings position performs unexpectedly, Swire Pacific 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 Swire Pacific will offset losses from the drop in Swire Pacific's long position.| FUJIFILM Holdings vs. Sumitomo Corp ADR | FUJIFILM Holdings vs. Hitachi | FUJIFILM Holdings vs. Marubeni Corp ADR | FUJIFILM Holdings vs. Mitsubishi Corp |
| Swire Pacific vs. CK Hutchison Holdings | Swire Pacific vs. Marubeni | Swire Pacific vs. Sumitomo Corp ADR | Swire Pacific vs. Marubeni Corp ADR |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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