Correlation Between Fujitsu and Fujitsu

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

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

Diversification Opportunities for Fujitsu and Fujitsu

0.71

Correlation Coefficient

Fujitsu  Fujitsu

Poor diversification

The 3 months correlation between Fujitsu and Fujitsu is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Fujitsu Limited 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 Fujitsu 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 Fujitsu Limited 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 Fujitsu i.e., Fujitsu and Fujitsu go up and down completely randomly.

Pair Corralation between Fujitsu and Fujitsu

Assuming the 90 days horizon Fujitsu Limited is expected to under-perform the Fujitsu. In addition to that, Fujitsu is 4.1 times more volatile than Fujitsu Ltd ADR. It trades about -0.05 of its total potential returns per unit of risk. Fujitsu Ltd ADR is currently generating about -0.12 per unit of volatility. If you would invest  1,785  in Fujitsu Ltd ADR on October 22, 2024 and sell it today you would lose (62.00) from holding Fujitsu Ltd ADR or give up 3.47% of portfolio value over 90 days.

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

Fujitsu Limited  vs.  Fujitsu Ltd ADR

Fujitsu Limited

Risk-Adjusted Performance

0 of 100

Very Weak

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

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 Fujitsu and Fujitsu

The main advantage of trading using opposite Fujitsu and Fujitsu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujitsu 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 Fujitsu Limited 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..