Correlation Between Haier Smart and Shin Etsu
Can any of the company-specific risk be diversified away by investing in both Haier Smart and Shin Etsu 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 Haier Smart and Shin Etsu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haier Smart Home and Shin Etsu Chemical Co, you can compare the effects of market volatilities on Haier Smart and Shin Etsu 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 Haier Smart with a short position of Shin Etsu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haier Smart and Shin Etsu.
Diversification Opportunities for Haier Smart and Shin Etsu
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Haier and Shin is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Haier Smart Home and Shin Etsu Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Etsu Chemical and Haier Smart 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 Haier Smart Home are associated (or correlated) with Shin Etsu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Etsu Chemical has no effect on the direction of Haier Smart i.e., Haier Smart and Shin Etsu go up and down completely randomly.
Pair Corralation between Haier Smart and Shin Etsu
Assuming the 90 days trading horizon Haier Smart Home is expected to generate 0.69 times more return on investment than Shin Etsu. However, Haier Smart Home is 1.44 times less risky than Shin Etsu. It trades about 0.14 of its potential returns per unit of risk. Shin Etsu Chemical Co is currently generating about -0.08 per unit of risk. If you would invest 181.00 in Haier Smart Home on December 1, 2024 and sell it today you would earn a total of 7.00 from holding Haier Smart Home or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haier Smart Home vs. Shin Etsu Chemical Co
Performance |
| Timeline |
| Haier Smart Home |
| Shin Etsu Chemical |
Haier Smart and Shin Etsu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haier Smart and Shin Etsu
The main advantage of trading using opposite Haier Smart and Shin Etsu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haier Smart position performs unexpectedly, Shin Etsu 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 Shin Etsu will offset losses from the drop in Shin Etsu's long position.| Haier Smart vs. JAPAN AIRLINES | Haier Smart vs. UNIVERSAL DISPLAY | Haier Smart vs. International Consolidated Airlines | Haier Smart vs. Playa Hotels Resorts |
| Shin Etsu vs. X FAB Silicon Foundries | Shin Etsu vs. Firan Technology Group | Shin Etsu vs. MeVis Medical Solutions | Shin Etsu vs. CREO MEDICAL GRP |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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