Correlation Between Fukuyama Transporting and Nissan Chemical

Can any of the company-specific risk be diversified away by investing in both Fukuyama Transporting and Nissan Chemical 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 Nissan Chemical 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 Nissan Chemical Corp, you can compare the effects of market volatilities on Fukuyama Transporting and Nissan Chemical 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 Nissan Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fukuyama Transporting and Nissan Chemical.

Diversification Opportunities for Fukuyama Transporting and Nissan Chemical

0.08

Correlation Coefficient

Fukuyama Transporting  Nissan Chemical

Significant diversification

The 3 months correlation between Fukuyama and Nissan is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Fukuyama Transporting Co and Nissan Chemical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nissan Chemical Corp 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 Nissan Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nissan Chemical Corp has no effect on the direction of Fukuyama Transporting i.e., Fukuyama Transporting and Nissan Chemical go up and down completely randomly.

Pair Corralation between Fukuyama Transporting and Nissan Chemical

Assuming the 90 days horizon Fukuyama Transporting Co is expected to under-perform the Nissan Chemical. In addition to that, Fukuyama Transporting is 1.25 times more volatile than Nissan Chemical Corp. It trades about -0.09 of its total potential returns per unit of risk. Nissan Chemical Corp is currently generating about 0.12 per unit of volatility. If you would invest  2,520  in Nissan Chemical Corp on April 25, 2025 and sell it today you would earn a total of  220.00  from holding Nissan Chemical Corp or generate 8.73% return on investment over 90 days.

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

Fukuyama Transporting Co  vs.  Nissan Chemical Corp

Fukuyama Transporting

Risk-Adjusted Performance

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 latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Nissan Chemical Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nissan Chemical Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Nissan Chemical may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Fukuyama Transporting and Nissan Chemical

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

The idea behind Fukuyama Transporting Co and Nissan Chemical Corp 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.