Correlation Between Champion Industries and FUJIFILM Holdings

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

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

Diversification Opportunities for Champion Industries and FUJIFILM Holdings

0.0

Correlation Coefficient

Champion Industries  FUJIFILM Holdings

Pay attention - limited upside

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

Pair Corralation between Champion Industries and FUJIFILM Holdings

If you would invest  2,261  in FUJIFILM Holdings on January 20, 2024 and sell it today you would lose (65.00) from holding FUJIFILM Holdings or give up 2.87% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Champion Industries  vs.  FUJIFILM Holdings

Champion Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Champion Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable primary indicators, Champion Industries is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

FUJIFILM Holdings

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FUJIFILM Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating forward indicators, FUJIFILM Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Champion Industries and FUJIFILM Holdings

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

The idea behind Champion Industries and FUJIFILM 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.

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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.