Correlation Between PGE and Fukuyama Transporting
Can any of the company-specific risk be diversified away by investing in both PGE 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 PGE and Fukuyama Transporting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PGE Corporation and Fukuyama Transporting Co, you can compare the effects of market volatilities on PGE 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 PGE with a short position of Fukuyama Transporting. Check out your portfolio center. Please also check ongoing floating volatility patterns of PGE and Fukuyama Transporting.
Diversification Opportunities for PGE and Fukuyama Transporting
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PGE and Fukuyama is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding PGE Corp. and Fukuyama Transporting Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fukuyama Transporting and PGE 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 PGE Corporation 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 PGE i.e., PGE and Fukuyama Transporting go up and down completely randomly.
Pair Corralation between PGE and Fukuyama Transporting
Assuming the 90 days horizon PGE Corporation is expected to under-perform the Fukuyama Transporting. But the stock apears to be less risky and, when comparing its historical volatility, PGE Corporation is 1.57 times less risky than Fukuyama Transporting. The stock trades about -0.25 of its potential returns per unit of risk. The Fukuyama Transporting Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,220 in Fukuyama Transporting Co on September 15, 2024 and sell it today you would earn a total of 80.00 from holding Fukuyama Transporting Co or generate 3.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PGE Corp. vs. Fukuyama Transporting Co
Performance |
| Timeline |
| PGE Corporation |
| Fukuyama Transporting |
PGE and Fukuyama Transporting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PGE and Fukuyama Transporting
The main advantage of trading using opposite PGE and Fukuyama Transporting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PGE 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.| PGE vs. NAKED WINES PLC | PGE vs. G III Apparel Group | PGE vs. SBI Insurance Group | PGE vs. INSURANCE AUST GRP |
| Fukuyama Transporting vs. SCHNEIDER NATLINC CLB | Fukuyama Transporting vs. Superior Plus Corp | Fukuyama Transporting vs. SIVERS SEMICONDUCTORS AB | Fukuyama Transporting vs. NorAm Drilling AS |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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