Correlation Between Broadridge Financial and Fuji Media

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

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

Diversification Opportunities for Broadridge Financial and Fuji Media

0.38

Correlation Coefficient

Broadridge Financial  Fuji Media

Weak diversification

The 3 months correlation between Broadridge and Fuji is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Broadridge Financial Solutions 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 Broadridge 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 Broadridge Financial Solutions 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 Broadridge Financial i.e., Broadridge Financial and Fuji Media go up and down completely randomly.

Pair Corralation between Broadridge Financial and Fuji Media

Assuming the 90 days horizon Broadridge Financial Solutions is expected to generate 0.75 times more return on investment than Fuji Media. However, Broadridge Financial Solutions is 1.34 times less risky than Fuji Media. It trades about 0.13 of its potential returns per unit of risk. Fuji Media Holdings is currently generating about -0.02 per unit of risk. If you would invest  19,921  in Broadridge Financial Solutions on October 10, 2024 and sell it today you would earn a total of  2,079  from holding Broadridge Financial Solutions or generate 10.44% return on investment over 90 days.

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

Broadridge Financial Solutions  vs.  Fuji Media Holdings

Broadridge Financial

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Broadridge Financial Solutions are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Broadridge Financial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Fuji Media Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fuji Media Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Fuji Media is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Broadridge Financial and Fuji Media

The main advantage of trading using opposite Broadridge Financial and Fuji Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broadridge Financial 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 Broadridge Financial Solutions 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 Commodity Directory module to find actively traded commodities issued by global exchanges.