Correlation Between Fanuc and AUREA SA

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

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

Diversification Opportunities for Fanuc and AUREA SA

-0.07

Correlation Coefficient

Fanuc  AUREA SA

Good diversification

The 3 months correlation between Fanuc and AUREA is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Fanuc and AUREA SA INH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUREA SA INH and Fanuc 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 Fanuc are associated (or correlated) with AUREA SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUREA SA INH has no effect on the direction of Fanuc i.e., Fanuc and AUREA SA go up and down completely randomly.

Pair Corralation between Fanuc and AUREA SA

Assuming the 90 days horizon Fanuc is expected to generate 4.18 times less return on investment than AUREA SA. But when comparing it to its historical volatility, Fanuc is 1.02 times less risky than AUREA SA. It trades about 0.03 of its potential returns per unit of risk. AUREA SA INH is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  504.00  in AUREA SA INH on April 23, 2025 and sell it today you would earn a total of  70.00  from holding AUREA SA INH or generate 13.89% return on investment over 90 days.

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

Fanuc  vs.  AUREA SA INH

Fanuc

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fanuc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Fanuc is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

AUREA SA INH

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AUREA SA INH are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, AUREA SA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fanuc and AUREA SA

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

The idea behind Fanuc and AUREA SA INH 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.