Correlation Between Furukawa Electric and FireFox Gold
Can any of the company-specific risk be diversified away by investing in both Furukawa Electric and FireFox Gold 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 FireFox Gold 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 FireFox Gold Corp, you can compare the effects of market volatilities on Furukawa Electric and FireFox Gold 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 FireFox Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Furukawa Electric and FireFox Gold.
Diversification Opportunities for Furukawa Electric and FireFox Gold
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Furukawa and FireFox is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Furukawa Electric Co and FireFox Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FireFox Gold Corp 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 FireFox Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FireFox Gold Corp has no effect on the direction of Furukawa Electric i.e., Furukawa Electric and FireFox Gold go up and down completely randomly.
Pair Corralation between Furukawa Electric and FireFox Gold
Assuming the 90 days horizon Furukawa Electric Co is expected to generate 0.52 times more return on investment than FireFox Gold. However, Furukawa Electric Co is 1.91 times less risky than FireFox Gold. It trades about 0.17 of its potential returns per unit of risk. FireFox Gold Corp is currently generating about 0.03 per unit of risk. If you would invest 1,455 in Furukawa Electric Co on September 1, 2024 and sell it today you would earn a total of 2,345 from holding Furukawa Electric Co or generate 161.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 54.44% |
| Values | Daily Returns |
Furukawa Electric Co vs. FireFox Gold Corp
Performance |
| Timeline |
| Furukawa Electric |
| FireFox Gold Corp |
Furukawa Electric and FireFox Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Furukawa Electric and FireFox Gold
The main advantage of trading using opposite Furukawa Electric and FireFox Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Furukawa Electric position performs unexpectedly, FireFox Gold 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 FireFox Gold will offset losses from the drop in FireFox Gold's long position.| Furukawa Electric vs. AFC Energy plc | Furukawa Electric vs. Loop Energy | Furukawa Electric vs. Sunrise New Energy | Furukawa Electric vs. Energizer Holdings |
| FireFox Gold vs. Palamina Corp | FireFox Gold vs. Gold Springs Resource | FireFox Gold vs. BTU Metals Corp | FireFox Gold vs. Norsemont Mining |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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