Correlation Between Biophytis and Fujitsu

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

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

Diversification Opportunities for Biophytis and Fujitsu

0.0

Correlation Coefficient

Biophytis  Fujitsu

Pay attention - limited upside

The 3 months correlation between Biophytis and Fujitsu is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Biophytis 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 Biophytis 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 Biophytis 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 Biophytis i.e., Biophytis and Fujitsu go up and down completely randomly.

Pair Corralation between Biophytis and Fujitsu

If you would invest  1,761  in Fujitsu Ltd ADR on December 29, 2024 and sell it today you would earn a total of  293.00  from holding Fujitsu Ltd ADR or generate 16.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Biophytis  vs.  Fujitsu Ltd ADR

Biophytis

Risk-Adjusted Performance

Very Weak

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

Fujitsu Ltd ADR

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fujitsu Ltd ADR are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Fujitsu showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Biophytis and Fujitsu

The main advantage of trading using opposite Biophytis and Fujitsu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biophytis 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 Biophytis 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.