Correlation Between AdvanSix and Shin-Etsu Chemical
Can any of the company-specific risk be diversified away by investing in both AdvanSix and Shin-Etsu 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 AdvanSix and Shin-Etsu Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AdvanSix and Shin Etsu Chemical Co, you can compare the effects of market volatilities on AdvanSix and Shin-Etsu 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 AdvanSix with a short position of Shin-Etsu Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of AdvanSix and Shin-Etsu Chemical.
Diversification Opportunities for AdvanSix and Shin-Etsu Chemical
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between AdvanSix and Shin-Etsu is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding AdvanSix 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 AdvanSix 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 AdvanSix are associated (or correlated) with Shin-Etsu Chemical. 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 AdvanSix i.e., AdvanSix and Shin-Etsu Chemical go up and down completely randomly.
Pair Corralation between AdvanSix and Shin-Etsu Chemical
Given the investment horizon of 90 days AdvanSix is expected to generate 0.89 times more return on investment than Shin-Etsu Chemical. However, AdvanSix is 1.12 times less risky than Shin-Etsu Chemical. It trades about 0.24 of its potential returns per unit of risk. Shin Etsu Chemical Co is currently generating about -0.09 per unit of risk. If you would invest 2,765 in AdvanSix on November 3, 2024 and sell it today you would earn a total of 363.00 from holding AdvanSix or generate 13.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AdvanSix vs. Shin Etsu Chemical Co
Performance |
| Timeline |
| AdvanSix |
| Shin Etsu Chemical |
AdvanSix and Shin-Etsu Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AdvanSix and Shin-Etsu Chemical
The main advantage of trading using opposite AdvanSix and Shin-Etsu Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AdvanSix position performs unexpectedly, Shin-Etsu 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 Shin-Etsu Chemical will offset losses from the drop in Shin-Etsu Chemical's long position.| AdvanSix vs. Methanex | AdvanSix vs. Lsb Industries | AdvanSix vs. Green Plains Renewable | AdvanSix vs. Tronox Holdings PLC |
| Shin-Etsu Chemical vs. Kuraray Co | Shin-Etsu Chemical vs. Mitsubishi Chemical Holdings | Shin-Etsu Chemical vs. Sumitomo Chemical Co | Shin-Etsu Chemical vs. Valhi Inc |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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