Correlation Between Shiny Chemical and Coremax Corp
Can any of the company-specific risk be diversified away by investing in both Shiny Chemical and Coremax Corp 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 Shiny Chemical and Coremax Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shiny Chemical Industrial and Coremax Corp, you can compare the effects of market volatilities on Shiny Chemical and Coremax Corp 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 Shiny Chemical with a short position of Coremax Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shiny Chemical and Coremax Corp.
Diversification Opportunities for Shiny Chemical and Coremax Corp
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shiny and Coremax is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Shiny Chemical Industrial and Coremax Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coremax Corp and Shiny Chemical 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 Shiny Chemical Industrial are associated (or correlated) with Coremax Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coremax Corp has no effect on the direction of Shiny Chemical i.e., Shiny Chemical and Coremax Corp go up and down completely randomly.
Pair Corralation between Shiny Chemical and Coremax Corp
Assuming the 90 days trading horizon Shiny Chemical Industrial is expected to generate 1.3 times more return on investment than Coremax Corp. However, Shiny Chemical is 1.3 times more volatile than Coremax Corp. It trades about -0.07 of its potential returns per unit of risk. Coremax Corp is currently generating about -0.12 per unit of risk. If you would invest 15,950 in Shiny Chemical Industrial on October 23, 2024 and sell it today you would lose (450.00) from holding Shiny Chemical Industrial or give up 2.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Shiny Chemical Industrial vs. Coremax Corp
Performance |
| Timeline |
| Shiny Chemical Industrial |
| Coremax Corp |
Shiny Chemical and Coremax Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shiny Chemical and Coremax Corp
The main advantage of trading using opposite Shiny Chemical and Coremax Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shiny Chemical position performs unexpectedly, Coremax Corp 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 Coremax Corp will offset losses from the drop in Coremax Corp's long position.| Shiny Chemical vs. China Steel Chemical | Shiny Chemical vs. TTET Union Corp | Shiny Chemical vs. Eternal Materials Co | Shiny Chemical vs. Yung Chi Paint |
| Coremax Corp vs. Mechema Chemicals Int | Coremax Corp vs. China Steel Chemical | Coremax Corp vs. Delta Electronics | Coremax Corp vs. Hota Industrial Mfg |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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