Correlation Between SYSTEMAIR and Fuji Media

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

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

Diversification Opportunities for SYSTEMAIR and Fuji Media

0.38

Correlation Coefficient

SYSTEMAIR  Fuji Media

Weak diversification

The 3 months correlation between SYSTEMAIR and Fuji is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding SYSTEMAIR AB and Fuji Media Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuji Media Holdings and SYSTEMAIR 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 SYSTEMAIR AB are associated (or correlated) with Fuji Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuji Media Holdings has no effect on the direction of SYSTEMAIR i.e., SYSTEMAIR and Fuji Media go up and down completely randomly.

Pair Corralation between SYSTEMAIR and Fuji Media

Assuming the 90 days trading horizon SYSTEMAIR AB is expected to under-perform the Fuji Media. But the stock apears to be less risky and, when comparing its historical volatility, SYSTEMAIR AB is 1.39 times less risky than Fuji Media. The stock trades about -0.17 of its potential returns per unit of risk. The Fuji Media Holdings is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,050  in Fuji Media Holdings on October 25, 2024 and sell it today you would earn a total of  50.00  from holding Fuji Media Holdings or generate 4.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	94.44%
Values	Daily Returns

SYSTEMAIR AB  vs.  Fuji Media Holdings

SYSTEMAIR AB

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SYSTEMAIR AB are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, SYSTEMAIR is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Fuji Media Holdings

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fuji Media Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Fuji Media exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SYSTEMAIR and Fuji Media

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

The idea behind SYSTEMAIR AB and Fuji Media Holdings 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.