Correlation Between Panasonic Corp and Fujitsu
Can any of the company-specific risk be diversified away by investing in both Panasonic Corp and Fujitsu 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 Panasonic Corp and Fujitsu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Panasonic Corp and Fujitsu Limited, you can compare the effects of market volatilities on Panasonic Corp and Fujitsu 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 Panasonic Corp with a short position of Fujitsu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panasonic Corp and Fujitsu.
Diversification Opportunities for Panasonic Corp and Fujitsu
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Panasonic and Fujitsu is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Panasonic Corp and Fujitsu Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujitsu Limited and Panasonic Corp 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 Panasonic Corp are associated (or correlated) with Fujitsu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujitsu Limited has no effect on the direction of Panasonic Corp i.e., Panasonic Corp and Fujitsu go up and down completely randomly.
Pair Corralation between Panasonic Corp and Fujitsu
Assuming the 90 days trading horizon Panasonic Corp is expected to generate 10.82 times less return on investment than Fujitsu. But when comparing it to its historical volatility, Panasonic Corp is 1.31 times less risky than Fujitsu. It trades about 0.01 of its potential returns per unit of risk. Fujitsu Limited is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,241 in Fujitsu Limited on September 14, 2024 and sell it today you would earn a total of 546.00 from holding Fujitsu Limited or generate 44.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Panasonic Corp vs. Fujitsu Limited
Performance |
| Timeline |
| Panasonic Corp |
| Fujitsu Limited |
Panasonic Corp and Fujitsu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Panasonic Corp and Fujitsu
The main advantage of trading using opposite Panasonic Corp and Fujitsu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Panasonic Corp position performs unexpectedly, Fujitsu 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 Fujitsu will offset losses from the drop in Fujitsu's long position.| Panasonic Corp vs. Perdoceo Education | Panasonic Corp vs. Corporate Travel Management | Panasonic Corp vs. Lion One Metals | Panasonic Corp vs. Waste Management |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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