Correlation Between Group 1 and FUJIFILM Holdings
Can any of the company-specific risk be diversified away by investing in both Group 1 and FUJIFILM Holdings 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 Group 1 and FUJIFILM Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Group 1 Automotive and FUJIFILM Holdings, you can compare the effects of market volatilities on Group 1 and FUJIFILM Holdings 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 Group 1 with a short position of FUJIFILM Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Group 1 and FUJIFILM Holdings.
Diversification Opportunities for Group 1 and FUJIFILM Holdings
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Group and FUJIFILM is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Group 1 Automotive and FUJIFILM Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUJIFILM Holdings and Group 1 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 Group 1 Automotive are associated (or correlated) with FUJIFILM Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUJIFILM Holdings has no effect on the direction of Group 1 i.e., Group 1 and FUJIFILM Holdings go up and down completely randomly.
Pair Corralation between Group 1 and FUJIFILM Holdings
Considering the 90-day investment horizon Group 1 Automotive is expected to generate 1.02 times more return on investment than FUJIFILM Holdings. However, Group 1 is 1.02 times more volatile than FUJIFILM Holdings. It trades about 0.37 of its potential returns per unit of risk. FUJIFILM Holdings is currently generating about 0.01 per unit of risk. If you would invest 41,490 in Group 1 Automotive on October 20, 2024 and sell it today you would earn a total of 3,276 from holding Group 1 Automotive or generate 7.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Group 1 Automotive vs. FUJIFILM Holdings
Performance |
| Timeline |
| Group 1 Automotive |
| FUJIFILM Holdings |
Group 1 and FUJIFILM Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Group 1 and FUJIFILM Holdings
The main advantage of trading using opposite Group 1 and FUJIFILM Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Group 1 position performs unexpectedly, FUJIFILM Holdings 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 FUJIFILM Holdings will offset losses from the drop in FUJIFILM Holdings' long position.| Group 1 vs. Comfort Systems USA | Group 1 vs. MasTec Inc | Group 1 vs. EMCOR Group | Group 1 vs. Granite Construction Incorporated |
| FUJIFILM Holdings vs. Hitachi Ltd ADR | FUJIFILM Holdings vs. Marubeni Corp ADR | FUJIFILM Holdings vs. Compass Diversified Holdings | FUJIFILM Holdings vs. Honeywell International |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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