Correlation Between Furukawa Electric and AKITA Drilling
Can any of the company-specific risk be diversified away by investing in both Furukawa Electric and AKITA Drilling 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 Furukawa Electric and AKITA Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Furukawa Electric Co and AKITA Drilling, you can compare the effects of market volatilities on Furukawa Electric and AKITA Drilling 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 Furukawa Electric with a short position of AKITA Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Furukawa Electric and AKITA Drilling.
Diversification Opportunities for Furukawa Electric and AKITA Drilling
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Furukawa and AKITA is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Furukawa Electric Co and AKITA Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AKITA Drilling and Furukawa Electric 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 Furukawa Electric Co are associated (or correlated) with AKITA Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AKITA Drilling has no effect on the direction of Furukawa Electric i.e., Furukawa Electric and AKITA Drilling go up and down completely randomly.
Pair Corralation between Furukawa Electric and AKITA Drilling
Assuming the 90 days horizon Furukawa Electric Co is expected to generate 5.35 times more return on investment than AKITA Drilling. However, Furukawa Electric is 5.35 times more volatile than AKITA Drilling. It trades about 0.17 of its potential returns per unit of risk. AKITA Drilling is currently generating about -0.02 per unit of risk. If you would invest 3,800 in Furukawa Electric Co on November 27, 2024 and sell it today you would earn a total of 1,030 from holding Furukawa Electric Co or generate 27.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Furukawa Electric Co vs. AKITA Drilling
Performance |
| Timeline |
| Furukawa Electric |
| AKITA Drilling |
Furukawa Electric and AKITA Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Furukawa Electric and AKITA Drilling
The main advantage of trading using opposite Furukawa Electric and AKITA Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Furukawa Electric position performs unexpectedly, AKITA Drilling 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 AKITA Drilling will offset losses from the drop in AKITA Drilling's long position.| Furukawa Electric vs. FREYR Battery SA | Furukawa Electric vs. nVent Electric PLC | Furukawa Electric vs. Hubbell | Furukawa Electric vs. Advanced Energy Industries |
| AKITA Drilling vs. Cathedral Energy Services | AKITA Drilling vs. Vantage Drilling International | AKITA Drilling vs. Seadrill Limited | AKITA Drilling vs. Noble plc |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |