Correlation Between Adyen NV and Fuji Media

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

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

Diversification Opportunities for Adyen NV and Fuji Media

0.53

Correlation Coefficient

Adyen NV  Fuji Media

Very weak diversification

The 3 months correlation between Adyen and Fuji is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Adyen NV 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 Adyen NV 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 Adyen NV 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 Adyen NV i.e., Adyen NV and Fuji Media go up and down completely randomly.

Pair Corralation between Adyen NV and Fuji Media

Assuming the 90 days horizon Adyen NV is expected to under-perform the Fuji Media. But the pink sheet apears to be less risky and, when comparing its historical volatility, Adyen NV is 1.02 times less risky than Fuji Media. The pink sheet trades about -0.03 of its potential returns per unit of risk. The Fuji Media Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,020  in Fuji Media Holdings on October 6, 2024 and sell it today you would earn a total of  30.00  from holding Fuji Media Holdings or generate 2.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.12%
Values	Daily Returns

Adyen NV  vs.  Fuji Media Holdings

Adyen NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adyen NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Adyen NV is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

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. In spite of rather sound basic indicators, Fuji Media is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Adyen NV and Fuji Media

The main advantage of trading using opposite Adyen NV and Fuji Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adyen NV 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 Adyen NV 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.