Correlation Between FREYR Battery and Furukawa Electric

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

By analyzing existing cross correlation between FREYR Battery SA and Furukawa Electric Co, you can compare the effects of market volatilities on FREYR Battery and Furukawa Electric 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 FREYR Battery with a short position of Furukawa Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of FREYR Battery and Furukawa Electric.

Diversification Opportunities for FREYR Battery and Furukawa Electric

-0.64

Correlation Coefficient

FREYR Battery  Furukawa Electric

Excellent diversification

The 3 months correlation between FREYR and Furukawa is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding FREYR Battery SA and Furukawa Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Furukawa Electric and FREYR Battery 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 FREYR Battery SA are associated (or correlated) with Furukawa Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Furukawa Electric has no effect on the direction of FREYR Battery i.e., FREYR Battery and Furukawa Electric go up and down completely randomly.

Pair Corralation between FREYR Battery and Furukawa Electric

If you would invest  4,830  in Furukawa Electric Co on December 29, 2024 and sell it today you would earn a total of  0.00  from holding Furukawa Electric Co or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	81.82%
Values	Daily Returns

FREYR Battery SA  vs.  Furukawa Electric Co

FREYR Battery SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days FREYR Battery SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Furukawa Electric

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Furukawa Electric Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Furukawa Electric reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FREYR Battery and Furukawa Electric

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

The idea behind FREYR Battery SA and Furukawa Electric Co 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 Transaction History module to view history of all your transactions and understand their impact on performance.