Correlation Between Furukawa Electric and CGX Energy
Can any of the company-specific risk be diversified away by investing in both Furukawa Electric and CGX Energy 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 CGX Energy 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 CGX Energy, you can compare the effects of market volatilities on Furukawa Electric and CGX Energy 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 CGX Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Furukawa Electric and CGX Energy.
Diversification Opportunities for Furukawa Electric and CGX Energy
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Furukawa and CGX is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Furukawa Electric Co and CGX Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGX Energy 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 CGX Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CGX Energy has no effect on the direction of Furukawa Electric i.e., Furukawa Electric and CGX Energy go up and down completely randomly.
Pair Corralation between Furukawa Electric and CGX Energy
Assuming the 90 days horizon Furukawa Electric Co is expected to generate 1.6 times more return on investment than CGX Energy. However, Furukawa Electric is 1.6 times more volatile than CGX Energy. It trades about 0.27 of its potential returns per unit of risk. CGX Energy is currently generating about 0.02 per unit of risk. If you would invest 2,622 in Furukawa Electric Co on August 30, 2024 and sell it today you would earn a total of 1,178 from holding Furukawa Electric Co or generate 44.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Furukawa Electric Co vs. CGX Energy
Performance |
| Timeline |
| Furukawa Electric |
| CGX Energy |
Furukawa Electric and CGX Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Furukawa Electric and CGX Energy
The main advantage of trading using opposite Furukawa Electric and CGX Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Furukawa Electric position performs unexpectedly, CGX Energy 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 CGX Energy will offset losses from the drop in CGX Energy'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 |
| CGX Energy vs. Yamaha Motor Co | CGX Energy vs. Nitto Denko Corp | CGX Energy vs. Farmers Merchants Bancorp | CGX Energy vs. Furukawa Electric Co |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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