Correlation Between Isetan Mitsukoshi and H2O Retailing
Can any of the company-specific risk be diversified away by investing in both Isetan Mitsukoshi and H2O Retailing 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 Isetan Mitsukoshi and H2O Retailing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Isetan Mitsukoshi Holdings and H2O Retailing, you can compare the effects of market volatilities on Isetan Mitsukoshi and H2O Retailing 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 Isetan Mitsukoshi with a short position of H2O Retailing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Isetan Mitsukoshi and H2O Retailing.
Diversification Opportunities for Isetan Mitsukoshi and H2O Retailing
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Isetan and H2O is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Isetan Mitsukoshi Holdings and H2O Retailing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H2O Retailing and Isetan Mitsukoshi 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 Isetan Mitsukoshi Holdings are associated (or correlated) with H2O Retailing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H2O Retailing has no effect on the direction of Isetan Mitsukoshi i.e., Isetan Mitsukoshi and H2O Retailing go up and down completely randomly.
Pair Corralation between Isetan Mitsukoshi and H2O Retailing
Assuming the 90 days horizon Isetan Mitsukoshi Holdings is expected to under-perform the H2O Retailing. In addition to that, Isetan Mitsukoshi is 1.8 times more volatile than H2O Retailing. It trades about -0.02 of its total potential returns per unit of risk. H2O Retailing is currently generating about 0.05 per unit of volatility. If you would invest 1,410 in H2O Retailing on November 4, 2024 and sell it today you would earn a total of 20.00 from holding H2O Retailing or generate 1.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Isetan Mitsukoshi Holdings vs. H2O Retailing
Performance |
| Timeline |
| Isetan Mitsukoshi |
| H2O Retailing |
Isetan Mitsukoshi and H2O Retailing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Isetan Mitsukoshi and H2O Retailing
The main advantage of trading using opposite Isetan Mitsukoshi and H2O Retailing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Isetan Mitsukoshi position performs unexpectedly, H2O Retailing 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 H2O Retailing will offset losses from the drop in H2O Retailing's long position.| Isetan Mitsukoshi vs. SHOPRITE HDGS ADR | Isetan Mitsukoshi vs. Shoprite Holdings Limited | Isetan Mitsukoshi vs. Dillards | Isetan Mitsukoshi vs. Macys Inc |
| H2O Retailing vs. Gladstone Investment | H2O Retailing vs. PURETECH HEALTH PLC | H2O Retailing vs. Planet Fitness | H2O Retailing vs. Virtus Investment Partners |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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