Correlation Between Grupo Media and Fuji Media

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

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

Diversification Opportunities for Grupo Media and Fuji Media

0.0

Correlation Coefficient

Grupo Media  Fuji Media

Pay attention - limited upside

The 3 months correlation between Grupo and Fuji is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Media Capital and Fuji Media Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuji Media Holdings and Grupo Media 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 Grupo Media Capital are associated (or correlated) with Fuji Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuji Media Holdings has no effect on the direction of Grupo Media i.e., Grupo Media and Fuji Media go up and down completely randomly.

Pair Corralation between Grupo Media and Fuji Media

If you would invest  1,110  in Fuji Media Holdings on December 21, 2024 and sell it today you would earn a total of  310.00  from holding Fuji Media Holdings or generate 27.93% return on investment over 90 days.

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

Grupo Media Capital  vs.  Fuji Media Holdings

Grupo Media Capital

Risk-Adjusted Performance

Very Weak

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

Fuji Media Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fuji Media Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Fuji Media exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grupo Media and Fuji Media

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

The idea behind Grupo Media Capital and Fuji Media Holdings 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 Transaction History module to view history of all your transactions and understand their impact on performance.