Correlation Between Furukawa Electric and Unicharm Corp
Can any of the company-specific risk be diversified away by investing in both Furukawa Electric and Unicharm Corp 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 Unicharm Corp 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 Unicharm Corp, you can compare the effects of market volatilities on Furukawa Electric and Unicharm Corp 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 Unicharm Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Furukawa Electric and Unicharm Corp.
Diversification Opportunities for Furukawa Electric and Unicharm Corp
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Furukawa and Unicharm is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Furukawa Electric Co and Unicharm Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unicharm 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 Unicharm Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unicharm Corp has no effect on the direction of Furukawa Electric i.e., Furukawa Electric and Unicharm Corp go up and down completely randomly.
Pair Corralation between Furukawa Electric and Unicharm Corp
Assuming the 90 days horizon Furukawa Electric Co is expected to generate 2.11 times more return on investment than Unicharm Corp. However, Furukawa Electric is 2.11 times more volatile than Unicharm Corp. It trades about 0.14 of its potential returns per unit of risk. Unicharm Corp is currently generating about -0.25 per unit of risk. If you would invest 2,749 in Furukawa Electric Co on September 4, 2024 and sell it today you would earn a total of 1,051 from holding Furukawa Electric Co or generate 38.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Furukawa Electric Co vs. Unicharm Corp
Performance |
| Timeline |
| Furukawa Electric |
| Unicharm Corp |
Furukawa Electric and Unicharm Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Furukawa Electric and Unicharm Corp
The main advantage of trading using opposite Furukawa Electric and Unicharm Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Furukawa Electric position performs unexpectedly, Unicharm Corp 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 Unicharm Corp will offset losses from the drop in Unicharm Corp's long position.| Furukawa Electric vs. Legrand SA ADR | Furukawa Electric vs. Loop Energy | Furukawa Electric vs. Sunrise New Energy | Furukawa Electric vs. Alfen NV |
| Unicharm Corp vs. LOreal Co ADR | Unicharm Corp vs. Unilever PLC ADR | Unicharm Corp vs. Kimberly Clark | Unicharm Corp vs. The Clorox |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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