Correlation Between Furukawa Electric and Unilever Indonesia
Can any of the company-specific risk be diversified away by investing in both Furukawa Electric and Unilever Indonesia 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 Unilever Indonesia 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 Unilever Indonesia Tbk, you can compare the effects of market volatilities on Furukawa Electric and Unilever Indonesia 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 Unilever Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Furukawa Electric and Unilever Indonesia.
Diversification Opportunities for Furukawa Electric and Unilever Indonesia
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Furukawa and Unilever is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Furukawa Electric Co and Unilever Indonesia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unilever Indonesia Tbk 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 Unilever Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unilever Indonesia Tbk has no effect on the direction of Furukawa Electric i.e., Furukawa Electric and Unilever Indonesia go up and down completely randomly.
Pair Corralation between Furukawa Electric and Unilever Indonesia
Assuming the 90 days horizon Furukawa Electric Co is expected to generate 2.36 times more return on investment than Unilever Indonesia. However, Furukawa Electric is 2.36 times more volatile than Unilever Indonesia Tbk. It trades about 0.29 of its potential returns per unit of risk. Unilever Indonesia Tbk is currently generating about 0.08 per unit of risk. If you would invest 2,622 in Furukawa Electric Co on September 4, 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 | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Furukawa Electric Co vs. Unilever Indonesia Tbk
Performance |
| Timeline |
| Furukawa Electric |
| Unilever Indonesia Tbk |
Furukawa Electric and Unilever Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Furukawa Electric and Unilever Indonesia
The main advantage of trading using opposite Furukawa Electric and Unilever Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Furukawa Electric position performs unexpectedly, Unilever Indonesia 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 Unilever Indonesia will offset losses from the drop in Unilever Indonesia'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 |
| Unilever Indonesia vs. Inter Parfums | Unilever Indonesia vs. European Wax Center | Unilever Indonesia vs. Spectrum Brands Holdings | Unilever Indonesia vs. Edgewell Personal Care |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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