Correlation Between AULT Old and Fujitsu

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

By analyzing existing cross correlation between AULT Old and Fujitsu Ltd ADR, you can compare the effects of market volatilities on AULT Old 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 AULT Old with a short position of Fujitsu. Check out your portfolio center. Please also check ongoing floating volatility patterns of AULT Old and Fujitsu.

Diversification Opportunities for AULT Old and Fujitsu

0.6

Correlation Coefficient

AULT Old  Fujitsu

Poor diversification

The 3 months correlation between AULT and Fujitsu is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding AULT Old 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 AULT Old 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 AULT Old 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 AULT Old i.e., AULT Old and Fujitsu go up and down completely randomly.

Pair Corralation between AULT Old and Fujitsu

If you would invest  21.00  in AULT Old on October 20, 2024 and sell it today you would earn a total of  0.00  from holding AULT Old or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	5.26%
Values	Daily Returns

AULT Old  vs.  Fujitsu Ltd ADR

AULT Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AULT Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, AULT Old is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Fujitsu Ltd ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fujitsu Ltd ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with AULT Old and Fujitsu

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

The idea behind AULT Old and Fujitsu Ltd ADR 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..