Correlation Between Furukawa Electric and Brunswick Exploration
Can any of the company-specific risk be diversified away by investing in both Furukawa Electric and Brunswick Exploration 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 Brunswick Exploration 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 Brunswick Exploration, you can compare the effects of market volatilities on Furukawa Electric and Brunswick Exploration 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 Brunswick Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Furukawa Electric and Brunswick Exploration.
Diversification Opportunities for Furukawa Electric and Brunswick Exploration
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Furukawa and Brunswick is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Furukawa Electric Co and Brunswick Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brunswick Exploration 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 Brunswick Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brunswick Exploration has no effect on the direction of Furukawa Electric i.e., Furukawa Electric and Brunswick Exploration go up and down completely randomly.
Pair Corralation between Furukawa Electric and Brunswick Exploration
Assuming the 90 days horizon Furukawa Electric Co is expected to generate 0.49 times more return on investment than Brunswick Exploration. However, Furukawa Electric Co is 2.04 times less risky than Brunswick Exploration. It trades about 0.1 of its potential returns per unit of risk. Brunswick Exploration is currently generating about 0.01 per unit of risk. If you would invest 1,563 in Furukawa Electric Co on August 30, 2024 and sell it today you would earn a total of 2,237 from holding Furukawa Electric Co or generate 143.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 61.01% |
| Values | Daily Returns |
Furukawa Electric Co vs. Brunswick Exploration
Performance |
| Timeline |
| Furukawa Electric |
| Brunswick Exploration |
Furukawa Electric and Brunswick Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Furukawa Electric and Brunswick Exploration
The main advantage of trading using opposite Furukawa Electric and Brunswick Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Furukawa Electric position performs unexpectedly, Brunswick Exploration 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 Brunswick Exploration will offset losses from the drop in Brunswick Exploration'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 |
| Brunswick Exploration vs. Vertiv Holdings Co | Brunswick Exploration vs. Nasdaq Inc | Brunswick Exploration vs. McDonalds | Brunswick Exploration vs. Walmart |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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