Correlation Between MARKET VECTR and FUJITSU

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

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

Diversification Opportunities for MARKET VECTR and FUJITSU

-0.02

Correlation Coefficient

MARKET VECTR  FUJITSU

Good diversification

The 3 months correlation between MARKET and FUJITSU is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding MARKET VECTR RETAIL 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 MARKET VECTR 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 MARKET VECTR RETAIL 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 MARKET VECTR i.e., MARKET VECTR and FUJITSU go up and down completely randomly.

Pair Corralation between MARKET VECTR and FUJITSU

Assuming the 90 days trading horizon MARKET VECTR RETAIL is expected to under-perform the FUJITSU. But the stock apears to be less risky and, when comparing its historical volatility, MARKET VECTR RETAIL is 2.1 times less risky than FUJITSU. The stock trades about -0.11 of its potential returns per unit of risk. The FUJITSU LTD ADR is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,710  in FUJITSU LTD ADR on December 21, 2024 and sell it today you would earn a total of  150.00  from holding FUJITSU LTD ADR or generate 8.77% return on investment over 90 days.

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

MARKET VECTR RETAIL  vs.  FUJITSU LTD ADR

MARKET VECTR RETAIL

Risk-Adjusted Performance

Very Weak

Over the last 90 days MARKET VECTR RETAIL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, MARKET VECTR is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

FUJITSU LTD ADR

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FUJITSU LTD ADR are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking indicators, FUJITSU may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with MARKET VECTR and FUJITSU

The main advantage of trading using opposite MARKET VECTR and FUJITSU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MARKET VECTR 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 MARKET VECTR RETAIL 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.