Correlation Between Legrand SA and Fuji Electric
Can any of the company-specific risk be diversified away by investing in both Legrand SA and Fuji Electric 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 Legrand SA and Fuji Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Legrand SA ADR and Fuji Electric Co, you can compare the effects of market volatilities on Legrand SA and Fuji Electric 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 Legrand SA with a short position of Fuji Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legrand SA and Fuji Electric.
Diversification Opportunities for Legrand SA and Fuji Electric
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Legrand and Fuji is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Legrand SA ADR and Fuji Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuji Electric and Legrand SA 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 Legrand SA ADR are associated (or correlated) with Fuji Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuji Electric has no effect on the direction of Legrand SA i.e., Legrand SA and Fuji Electric go up and down completely randomly.
Pair Corralation between Legrand SA and Fuji Electric
Assuming the 90 days horizon Legrand SA is expected to generate 1.55 times less return on investment than Fuji Electric. But when comparing it to its historical volatility, Legrand SA ADR is 1.57 times less risky than Fuji Electric. It trades about 0.04 of its potential returns per unit of risk. Fuji Electric Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 998.00 in Fuji Electric Co on August 28, 2024 and sell it today you would earn a total of 368.00 from holding Fuji Electric Co or generate 36.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legrand SA ADR vs. Fuji Electric Co
Performance |
| Timeline |
| Legrand SA ADR |
| Fuji Electric |
Legrand SA and Fuji Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legrand SA and Fuji Electric
The main advantage of trading using opposite Legrand SA and Fuji Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legrand SA position performs unexpectedly, Fuji Electric 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 Fuji Electric will offset losses from the drop in Fuji Electric's long position.| Legrand SA vs. FREYR Battery SA | Legrand SA vs. nVent Electric PLC | Legrand SA vs. Hubbell | Legrand SA vs. Advanced Energy Industries |
| Fuji Electric vs. FREYR Battery SA | Fuji Electric vs. nVent Electric PLC | Fuji Electric vs. Hubbell | Fuji Electric vs. Advanced Energy Industries |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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