Correlation Between Aumann AG and Fanuc

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

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

Diversification Opportunities for Aumann AG and Fanuc

0.61

Correlation Coefficient

Aumann AG  Fanuc

Poor diversification

The 3 months correlation between Aumann and Fanuc is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Aumann AG and Fanuc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fanuc and Aumann AG 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 Aumann AG are associated (or correlated) with Fanuc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fanuc has no effect on the direction of Aumann AG i.e., Aumann AG and Fanuc go up and down completely randomly.

Pair Corralation between Aumann AG and Fanuc

Assuming the 90 days horizon Aumann AG is expected to generate 1.57 times more return on investment than Fanuc. However, Aumann AG is 1.57 times more volatile than Fanuc. It trades about 0.14 of its potential returns per unit of risk. Fanuc is currently generating about 0.11 per unit of risk. If you would invest  1,050  in Aumann AG on December 29, 2024 and sell it today you would earn a total of  250.00  from holding Aumann AG or generate 23.81% return on investment over 90 days.

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

Aumann AG  vs.  Fanuc

Aumann AG

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aumann AG are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Aumann AG reported solid returns over the last few months and may actually be approaching a breakup point.

Fanuc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fanuc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Fanuc may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Aumann AG and Fanuc

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

The idea behind Aumann AG and Fanuc 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.