Correlation Between NVent Electric and Fuji Electric
Can any of the company-specific risk be diversified away by investing in both NVent Electric 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 NVent Electric and Fuji Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between nVent Electric PLC and Fuji Electric Co, you can compare the effects of market volatilities on NVent Electric 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 NVent Electric with a short position of Fuji Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVent Electric and Fuji Electric.
Diversification Opportunities for NVent Electric and Fuji Electric
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between NVent and Fuji is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding nVent Electric PLC and Fuji Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuji Electric and NVent Electric 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 nVent Electric PLC 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 NVent Electric i.e., NVent Electric and Fuji Electric go up and down completely randomly.
Pair Corralation between NVent Electric and Fuji Electric
Considering the 90-day investment horizon NVent Electric is expected to generate 1.34 times less return on investment than Fuji Electric. In addition to that, NVent Electric is 1.85 times more volatile than Fuji Electric Co. It trades about 0.07 of its total potential returns per unit of risk. Fuji Electric Co is currently generating about 0.18 per unit of volatility. If you would invest 1,276 in Fuji Electric Co on August 28, 2024 and sell it today you would earn a total of 90.00 from holding Fuji Electric Co or generate 7.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
nVent Electric PLC vs. Fuji Electric Co
Performance |
| Timeline |
| nVent Electric PLC |
| Fuji Electric |
NVent Electric and Fuji Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NVent Electric and Fuji Electric
The main advantage of trading using opposite NVent Electric and Fuji Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVent Electric 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.| NVent Electric vs. Hubbell | NVent Electric vs. Advanced Energy Industries | NVent Electric vs. Vertiv Holdings Co | NVent Electric vs. Energizer Holdings |
| 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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