Correlation Between Suntory Beverage and STELLA-JONES INC
Can any of the company-specific risk be diversified away by investing in both Suntory Beverage and STELLA-JONES INC 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 Suntory Beverage and STELLA-JONES INC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suntory Beverage Food and STELLA JONES INC, you can compare the effects of market volatilities on Suntory Beverage and STELLA-JONES INC 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 Suntory Beverage with a short position of STELLA-JONES INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suntory Beverage and STELLA-JONES INC.
Diversification Opportunities for Suntory Beverage and STELLA-JONES INC
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Suntory and STELLA-JONES is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Suntory Beverage Food and STELLA JONES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STELLA JONES INC and Suntory Beverage 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 Suntory Beverage Food are associated (or correlated) with STELLA-JONES INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STELLA JONES INC has no effect on the direction of Suntory Beverage i.e., Suntory Beverage and STELLA-JONES INC go up and down completely randomly.
Pair Corralation between Suntory Beverage and STELLA-JONES INC
Assuming the 90 days horizon Suntory Beverage is expected to generate 6.21 times less return on investment than STELLA-JONES INC. But when comparing it to its historical volatility, Suntory Beverage Food is 1.46 times less risky than STELLA-JONES INC. It trades about 0.01 of its potential returns per unit of risk. STELLA JONES INC is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,219 in STELLA JONES INC on September 2, 2024 and sell it today you would earn a total of 1,481 from holding STELLA JONES INC or generate 46.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suntory Beverage Food vs. STELLA JONES INC
Performance |
| Timeline |
| Suntory Beverage Food |
| STELLA JONES INC |
Suntory Beverage and STELLA-JONES INC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suntory Beverage and STELLA-JONES INC
The main advantage of trading using opposite Suntory Beverage and STELLA-JONES INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suntory Beverage position performs unexpectedly, STELLA-JONES INC 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 STELLA-JONES INC will offset losses from the drop in STELLA-JONES INC's long position.| Suntory Beverage vs. Heineken Holding NV | Suntory Beverage vs. Superior Plus Corp | Suntory Beverage vs. NMI Holdings | Suntory Beverage vs. Origin Agritech |
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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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