Correlation Between LIFE BANC and FUJITSU
Can any of the company-specific risk be diversified away by investing in both LIFE BANC 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 LIFE BANC and FUJITSU into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIFE BANC SPLIT and FUJITSU LTD ADR, you can compare the effects of market volatilities on LIFE BANC 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 LIFE BANC with a short position of FUJITSU. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFE BANC and FUJITSU.
Diversification Opportunities for LIFE BANC and FUJITSU
Very good diversification
The 3 months correlation between LIFE and FUJITSU is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding LIFE BANC SPLIT 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 LIFE BANC 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 LIFE BANC SPLIT 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 LIFE BANC i.e., LIFE BANC and FUJITSU go up and down completely randomly.
Pair Corralation between LIFE BANC and FUJITSU
Assuming the 90 days horizon LIFE BANC SPLIT is expected to generate 1.3 times more return on investment than FUJITSU. However, LIFE BANC is 1.3 times more volatile than FUJITSU LTD ADR. It trades about 0.08 of its potential returns per unit of risk. FUJITSU LTD ADR is currently generating about 0.09 per unit of risk. If you would invest 473.00 in LIFE BANC SPLIT on September 5, 2024 and sell it today you would earn a total of 142.00 from holding LIFE BANC SPLIT or generate 30.02% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
LIFE BANC SPLIT vs. FUJITSU LTD ADR
Performance |
Timeline |
LIFE BANC SPLIT |
FUJITSU LTD ADR |
LIFE BANC and FUJITSU Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with LIFE BANC and FUJITSU
The main advantage of trading using opposite LIFE BANC and FUJITSU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIFE BANC 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.LIFE BANC vs. CAREER EDUCATION | LIFE BANC vs. Fukuyama Transporting Co | LIFE BANC vs. Transport International Holdings | LIFE BANC vs. Broadcom |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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