Correlation Between Fukuyama Transporting and REINET INVESTMENTS

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

By analyzing existing cross correlation between Fukuyama Transporting Co and REINET INVESTMENTS SCA, you can compare the effects of market volatilities on Fukuyama Transporting and REINET INVESTMENTS 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 Fukuyama Transporting with a short position of REINET INVESTMENTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fukuyama Transporting and REINET INVESTMENTS.

Diversification Opportunities for Fukuyama Transporting and REINET INVESTMENTS

-0.18

Correlation Coefficient

Fukuyama Transporting  REINET INVESTMENTS

Good diversification

The 3 months correlation between Fukuyama and REINET is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Fukuyama Transporting Co and REINET INVESTMENTS SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REINET INVESTMENTS SCA and Fukuyama Transporting 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 Fukuyama Transporting Co are associated (or correlated) with REINET INVESTMENTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REINET INVESTMENTS SCA has no effect on the direction of Fukuyama Transporting i.e., Fukuyama Transporting and REINET INVESTMENTS go up and down completely randomly.

Pair Corralation between Fukuyama Transporting and REINET INVESTMENTS

Assuming the 90 days horizon Fukuyama Transporting is expected to generate 1.55 times less return on investment than REINET INVESTMENTS. But when comparing it to its historical volatility, Fukuyama Transporting Co is 1.41 times less risky than REINET INVESTMENTS. It trades about 0.04 of its potential returns per unit of risk. REINET INVESTMENTS SCA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,610  in REINET INVESTMENTS SCA on October 4, 2024 and sell it today you would earn a total of  870.00  from holding REINET INVESTMENTS SCA or generate 54.04% return on investment over 90 days.

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

Fukuyama Transporting Co  vs.  REINET INVESTMENTS SCA

Fukuyama Transporting

Risk-Adjusted Performance

0 of 100

Very Weak

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

REINET INVESTMENTS SCA

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in REINET INVESTMENTS SCA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, REINET INVESTMENTS may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Fukuyama Transporting and REINET INVESTMENTS

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

The idea behind Fukuyama Transporting Co and REINET INVESTMENTS SCA 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.

Check out your portfolio center.

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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.