Correlation Between Furukawa Electric and Isuzu Motors
Can any of the company-specific risk be diversified away by investing in both Furukawa Electric and Isuzu Motors 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 Isuzu Motors 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 Isuzu Motors Limited, you can compare the effects of market volatilities on Furukawa Electric and Isuzu Motors 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 Isuzu Motors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Furukawa Electric and Isuzu Motors.
Diversification Opportunities for Furukawa Electric and Isuzu Motors
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Furukawa and Isuzu is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Furukawa Electric Co and Isuzu Motors Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Isuzu Motors Limited 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 Isuzu Motors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Isuzu Motors Limited has no effect on the direction of Furukawa Electric i.e., Furukawa Electric and Isuzu Motors go up and down completely randomly.
Pair Corralation between Furukawa Electric and Isuzu Motors
Assuming the 90 days horizon Furukawa Electric Co is expected to generate 1.7 times more return on investment than Isuzu Motors. However, Furukawa Electric is 1.7 times more volatile than Isuzu Motors Limited. It trades about 0.27 of its potential returns per unit of risk. Isuzu Motors Limited is currently generating about 0.14 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Furukawa Electric Co vs. Isuzu Motors Limited
Performance |
| Timeline |
| Furukawa Electric |
| Isuzu Motors Limited |
Furukawa Electric and Isuzu Motors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Furukawa Electric and Isuzu Motors
The main advantage of trading using opposite Furukawa Electric and Isuzu Motors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Furukawa Electric position performs unexpectedly, Isuzu Motors 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 Isuzu Motors will offset losses from the drop in Isuzu Motors' long position.| Furukawa Electric vs. Novonix Ltd ADR | Furukawa Electric vs. Ilika plc | Furukawa Electric vs. FuelPositive Corp | Furukawa Electric vs. Novonix |
| Isuzu Motors vs. General Motors | Isuzu Motors vs. Tesla Inc | Isuzu Motors vs. Rivian Automotive | Isuzu Motors vs. Nio Class A |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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