Correlation Between Ming Le and FUJITSU
Can any of the company-specific risk be diversified away by investing in both Ming Le 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 Ming Le and FUJITSU into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ming Le Sports and FUJITSU LTD ADR, you can compare the effects of market volatilities on Ming Le 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 Ming Le with a short position of FUJITSU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ming Le and FUJITSU.
Diversification Opportunities for Ming Le and FUJITSU
Very good diversification
The 3 months correlation between Ming and FUJITSU is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Ming Le Sports and FUJITSU LTD ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUJITSU LTD ADR and Ming Le 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 Ming Le Sports 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 LTD ADR has no effect on the direction of Ming Le i.e., Ming Le and FUJITSU go up and down completely randomly.
Pair Corralation between Ming Le and FUJITSU
Assuming the 90 days trading horizon Ming Le Sports is expected to generate 4.05 times more return on investment than FUJITSU. However, Ming Le is 4.05 times more volatile than FUJITSU LTD ADR. It trades about 0.23 of its potential returns per unit of risk. FUJITSU LTD ADR is currently generating about 0.28 per unit of risk. If you would invest 100.00 in Ming Le Sports on September 5, 2024 and sell it today you would earn a total of 39.00 from holding Ming Le Sports or generate 39.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ming Le Sports vs. FUJITSU LTD ADR
Performance |
| Timeline |
| Ming Le Sports |
| FUJITSU LTD ADR |
Ming Le and FUJITSU Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ming Le and FUJITSU
The main advantage of trading using opposite Ming Le and FUJITSU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ming Le 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.| Ming Le vs. Tyson Foods | Ming Le vs. SMA Solar Technology | Ming Le vs. Cal Maine Foods | Ming Le vs. Food Life Companies |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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