Correlation Between AKITA Drilling and Hitachi Metals
Can any of the company-specific risk be diversified away by investing in both AKITA Drilling and Hitachi Metals 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 AKITA Drilling and Hitachi Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AKITA Drilling and Hitachi Metals, you can compare the effects of market volatilities on AKITA Drilling and Hitachi Metals 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 AKITA Drilling with a short position of Hitachi Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of AKITA Drilling and Hitachi Metals.
Diversification Opportunities for AKITA Drilling and Hitachi Metals
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AKITA and Hitachi is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding AKITA Drilling and Hitachi Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hitachi Metals and AKITA Drilling 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 AKITA Drilling are associated (or correlated) with Hitachi Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hitachi Metals has no effect on the direction of AKITA Drilling i.e., AKITA Drilling and Hitachi Metals go up and down completely randomly.
Pair Corralation between AKITA Drilling and Hitachi Metals
If you would invest 100,000,000 in Hitachi Metals on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Hitachi Metals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
AKITA Drilling vs. Hitachi Metals
Performance |
| Timeline |
| AKITA Drilling |
| Hitachi Metals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
AKITA Drilling and Hitachi Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AKITA Drilling and Hitachi Metals
The main advantage of trading using opposite AKITA Drilling and Hitachi Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AKITA Drilling position performs unexpectedly, Hitachi Metals 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 Hitachi Metals will offset losses from the drop in Hitachi Metals' long position.| AKITA Drilling vs. POSCO Holdings | AKITA Drilling vs. Schweizerische Nationalbank | AKITA Drilling vs. Berkshire Hathaway | AKITA Drilling vs. Berkshire Hathaway |
| Hitachi Metals vs. SunLink Health Systems | Hitachi Metals vs. The Gap, | Hitachi Metals vs. BBB Foods | Hitachi Metals vs. Bridgford Foods |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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