Correlation Between Lekoil and Fukuyama Transporting
Can any of the company-specific risk be diversified away by investing in both Lekoil and Fukuyama Transporting 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 Lekoil and Fukuyama Transporting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lekoil Limited and Fukuyama Transporting Co, you can compare the effects of market volatilities on Lekoil and Fukuyama Transporting 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 Lekoil with a short position of Fukuyama Transporting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lekoil and Fukuyama Transporting.
Diversification Opportunities for Lekoil and Fukuyama Transporting
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lekoil and Fukuyama is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Lekoil Limited and Fukuyama Transporting Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fukuyama Transporting and Lekoil 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 Lekoil Limited are associated (or correlated) with Fukuyama Transporting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fukuyama Transporting has no effect on the direction of Lekoil i.e., Lekoil and Fukuyama Transporting go up and down completely randomly.
Pair Corralation between Lekoil and Fukuyama Transporting
Assuming the 90 days horizon Lekoil Limited is expected to generate 3.69 times more return on investment than Fukuyama Transporting. However, Lekoil is 3.69 times more volatile than Fukuyama Transporting Co. It trades about 0.05 of its potential returns per unit of risk. Fukuyama Transporting Co is currently generating about 0.04 per unit of risk. If you would invest 1.05 in Lekoil Limited on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Lekoil Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lekoil Limited vs. Fukuyama Transporting Co
Performance |
| Timeline |
| Lekoil Limited |
| Fukuyama Transporting |
Lekoil and Fukuyama Transporting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lekoil and Fukuyama Transporting
The main advantage of trading using opposite Lekoil and Fukuyama Transporting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lekoil position performs unexpectedly, Fukuyama Transporting 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 Fukuyama Transporting will offset losses from the drop in Fukuyama Transporting's long position.| Lekoil vs. CDN IMPERIAL BANK | Lekoil vs. SOFTBANK P ADR | Lekoil vs. Entravision Communications | Lekoil vs. Ameriprise Financial |
| Fukuyama Transporting vs. Werner Enterprises | Fukuyama Transporting vs. Seino Holdings Co | Fukuyama Transporting vs. Superior Plus Corp | Fukuyama Transporting vs. NMI Holdings |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |