Correlation Between Asahi Kasei and Univar
Can any of the company-specific risk be diversified away by investing in both Asahi Kasei and Univar 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 Asahi Kasei and Univar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asahi Kasei and Univar Inc, you can compare the effects of market volatilities on Asahi Kasei and Univar 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 Asahi Kasei with a short position of Univar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asahi Kasei and Univar.
Diversification Opportunities for Asahi Kasei and Univar
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asahi and Univar is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Asahi Kasei and Univar Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Univar Inc and Asahi Kasei 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 Asahi Kasei are associated (or correlated) with Univar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Univar Inc has no effect on the direction of Asahi Kasei i.e., Asahi Kasei and Univar go up and down completely randomly.
Pair Corralation between Asahi Kasei and Univar
Assuming the 90 days horizon Asahi Kasei is expected to generate 24.38 times more return on investment than Univar. However, Asahi Kasei is 24.38 times more volatile than Univar Inc. It trades about 0.04 of its potential returns per unit of risk. Univar Inc is currently generating about 0.21 per unit of risk. If you would invest 652.00 in Asahi Kasei on September 2, 2024 and sell it today you would earn a total of 108.00 from holding Asahi Kasei or generate 16.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 13.62% |
| Values | Daily Returns |
Asahi Kasei vs. Univar Inc
Performance |
| Timeline |
| Asahi Kasei |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Univar Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Asahi Kasei and Univar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asahi Kasei and Univar
The main advantage of trading using opposite Asahi Kasei and Univar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asahi Kasei position performs unexpectedly, Univar 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 Univar will offset losses from the drop in Univar's long position.| Asahi Kasei vs. Altech Batteries Limited | Asahi Kasei vs. Alumifuel Pwr Corp | Asahi Kasei vs. Shin Etsu Chemical Co | Asahi Kasei vs. ASP Isotopes Common |
| Univar vs. Valhi Inc | Univar vs. Huntsman | Univar vs. Lsb Industries | Univar vs. Westlake Chemical 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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