Correlation Between FUJIFILM Holdings and Brother Industries

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

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

Diversification Opportunities for FUJIFILM Holdings and Brother Industries

-0.31

Correlation Coefficient

FUJIFILM Holdings  Brother Industries

Very good diversification

The 3 months correlation between FUJIFILM and Brother is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding FUJIFILM Holdings and Brother Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brother Industries and FUJIFILM Holdings 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 FUJIFILM Holdings are associated (or correlated) with Brother Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brother Industries has no effect on the direction of FUJIFILM Holdings i.e., FUJIFILM Holdings and Brother Industries go up and down completely randomly.

Pair Corralation between FUJIFILM Holdings and Brother Industries

Assuming the 90 days horizon FUJIFILM Holdings is expected to generate 0.18 times more return on investment than Brother Industries. However, FUJIFILM Holdings is 5.62 times less risky than Brother Industries. It trades about 0.02 of its potential returns per unit of risk. Brother Industries is currently generating about -0.14 per unit of risk. If you would invest  2,461  in FUJIFILM Holdings on September 18, 2024 and sell it today you would earn a total of  32.00  from holding FUJIFILM Holdings or generate 1.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

FUJIFILM Holdings  vs.  Brother Industries

FUJIFILM Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FUJIFILM Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward indicators, FUJIFILM Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Brother Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brother Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with FUJIFILM Holdings and Brother Industries

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

The idea behind FUJIFILM Holdings and Brother Industries 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.