Correlation Between Fukuoka Financial and Hawesko Holding

Can any of the company-specific risk be diversified away by investing in both Fukuoka Financial and Hawesko Holding 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 Fukuoka Financial and Hawesko Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fukuoka Financial Group and Hawesko Holding AG, you can compare the effects of market volatilities on Fukuoka Financial and Hawesko Holding 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 Fukuoka Financial with a short position of Hawesko Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fukuoka Financial and Hawesko Holding.

Diversification Opportunities for Fukuoka Financial and Hawesko Holding

-0.39

Correlation Coefficient

Fukuoka Financial  Hawesko Holding

Very good diversification

The 3 months correlation between Fukuoka and Hawesko is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Fukuoka Financial Group and Hawesko Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawesko Holding AG and Fukuoka Financial 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 Fukuoka Financial Group are associated (or correlated) with Hawesko Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawesko Holding AG has no effect on the direction of Fukuoka Financial i.e., Fukuoka Financial and Hawesko Holding go up and down completely randomly.

Pair Corralation between Fukuoka Financial and Hawesko Holding

Assuming the 90 days horizon Fukuoka Financial is expected to generate 1.03 times less return on investment than Hawesko Holding. But when comparing it to its historical volatility, Fukuoka Financial Group is 1.38 times less risky than Hawesko Holding. It trades about 0.07 of its potential returns per unit of risk. Hawesko Holding AG is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  2,600  in Hawesko Holding AG on September 27, 2024 and sell it today you would earn a total of  170.00  from holding Hawesko Holding AG or generate 6.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Fukuoka Financial Group  vs.  Hawesko Holding AG

Fukuoka Financial

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fukuoka Financial Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Fukuoka Financial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Hawesko Holding AG

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hawesko Holding AG are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Hawesko Holding may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Fukuoka Financial and Hawesko Holding

The main advantage of trading using opposite Fukuoka Financial and Hawesko Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fukuoka Financial position performs unexpectedly, Hawesko Holding 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 Hawesko Holding will offset losses from the drop in Hawesko Holding's long position.

The idea behind Fukuoka Financial Group and Hawesko Holding AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.