Correlation Between Hanshin Construction and Stic Investments
Can any of the company-specific risk be diversified away by investing in both Hanshin Construction and Stic Investments 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 Hanshin Construction and Stic Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanshin Construction Co and Stic Investments, you can compare the effects of market volatilities on Hanshin Construction and Stic Investments 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 Hanshin Construction with a short position of Stic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanshin Construction and Stic Investments.
Diversification Opportunities for Hanshin Construction and Stic Investments
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hanshin and Stic is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Hanshin Construction Co and Stic Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stic Investments and Hanshin Construction 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 Hanshin Construction Co are associated (or correlated) with Stic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stic Investments has no effect on the direction of Hanshin Construction i.e., Hanshin Construction and Stic Investments go up and down completely randomly.
Pair Corralation between Hanshin Construction and Stic Investments
Assuming the 90 days trading horizon Hanshin Construction Co is expected to generate 1.25 times more return on investment than Stic Investments. However, Hanshin Construction is 1.25 times more volatile than Stic Investments. It trades about 0.19 of its potential returns per unit of risk. Stic Investments is currently generating about 0.0 per unit of risk. If you would invest 616,000 in Hanshin Construction Co on November 27, 2024 and sell it today you would earn a total of 34,000 from holding Hanshin Construction Co or generate 5.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanshin Construction Co vs. Stic Investments
Performance |
| Timeline |
| Hanshin Construction |
| Stic Investments |
Hanshin Construction and Stic Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanshin Construction and Stic Investments
The main advantage of trading using opposite Hanshin Construction and Stic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanshin Construction position performs unexpectedly, Stic Investments 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 Stic Investments will offset losses from the drop in Stic Investments' long position.| Hanshin Construction vs. Mobile Appliance | Hanshin Construction vs. BGF Retail Co | Hanshin Construction vs. Eugene Investment Securities | Hanshin Construction vs. Daishin Information Communications |
| Stic Investments vs. Alton Sports CoLtd | Stic Investments vs. Playgram Co | Stic Investments vs. Dongwoon Anatech Co | Stic Investments vs. Hanyang Digitech Co |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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