Correlation Between Amphastar and Fuji Electric

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

By analyzing existing cross correlation between Amphastar P and Fuji Electric Co, you can compare the effects of market volatilities on Amphastar 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 Amphastar with a short position of Fuji Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amphastar and Fuji Electric.

Diversification Opportunities for Amphastar and Fuji Electric

-0.4

Correlation Coefficient

Amphastar  Fuji Electric

Very good diversification

The 3 months correlation between Amphastar and Fuji is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Amphastar P and Fuji Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuji Electric and Amphastar 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 Amphastar P 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 Amphastar i.e., Amphastar and Fuji Electric go up and down completely randomly.

Pair Corralation between Amphastar and Fuji Electric

Given the investment horizon of 90 days Amphastar P is expected to under-perform the Fuji Electric. In addition to that, Amphastar is 1.21 times more volatile than Fuji Electric Co. It trades about -0.05 of its total potential returns per unit of risk. Fuji Electric Co is currently generating about 0.03 per unit of volatility. If you would invest  1,412  in Fuji Electric Co on September 13, 2024 and sell it today you would earn a total of  42.00  from holding Fuji Electric Co or generate 2.97% return on investment over 90 days.

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

Amphastar P  vs.  Fuji Electric Co

Amphastar P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amphastar P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Fuji Electric

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fuji Electric Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Fuji Electric is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Amphastar and Fuji Electric

The main advantage of trading using opposite Amphastar and Fuji Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amphastar 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.

The idea behind Amphastar P and Fuji Electric Co 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.

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.