Correlation Between Aluminumof China and Sekisui Chemical
Can any of the company-specific risk be diversified away by investing in both Aluminumof China and Sekisui Chemical 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 Aluminumof China and Sekisui Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aluminum of and Sekisui Chemical Co, you can compare the effects of market volatilities on Aluminumof China and Sekisui Chemical 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 Aluminumof China with a short position of Sekisui Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluminumof China and Sekisui Chemical.
Diversification Opportunities for Aluminumof China and Sekisui Chemical
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aluminumof and Sekisui is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aluminum of and Sekisui Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sekisui Chemical and Aluminumof China 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 Aluminum of are associated (or correlated) with Sekisui Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sekisui Chemical has no effect on the direction of Aluminumof China i.e., Aluminumof China and Sekisui Chemical go up and down completely randomly.
Pair Corralation between Aluminumof China and Sekisui Chemical
Assuming the 90 days horizon Aluminumof China is expected to generate 1.7 times less return on investment than Sekisui Chemical. In addition to that, Aluminumof China is 1.93 times more volatile than Sekisui Chemical Co. It trades about 0.04 of its total potential returns per unit of risk. Sekisui Chemical Co is currently generating about 0.13 per unit of volatility. If you would invest 1,410 in Sekisui Chemical Co on September 12, 2024 and sell it today you would earn a total of 80.00 from holding Sekisui Chemical Co or generate 5.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aluminum of vs. Sekisui Chemical Co
Performance |
| Timeline |
| Aluminumof China |
| Sekisui Chemical |
Aluminumof China and Sekisui Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aluminumof China and Sekisui Chemical
The main advantage of trading using opposite Aluminumof China and Sekisui Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluminumof China position performs unexpectedly, Sekisui Chemical 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 Sekisui Chemical will offset losses from the drop in Sekisui Chemical's long position.| Aluminumof China vs. Norsk Hydro ASA | Aluminumof China vs. Kaiser Aluminum | Aluminumof China vs. Superior Plus Corp | Aluminumof China vs. SIVERS SEMICONDUCTORS AB |
| Sekisui Chemical vs. Lennar | Sekisui Chemical vs. Superior Plus Corp | Sekisui Chemical vs. SIVERS SEMICONDUCTORS AB | Sekisui Chemical vs. NorAm Drilling AS |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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