Correlation Between Brockhaus Capital and ITOCHU
Can any of the company-specific risk be diversified away by investing in both Brockhaus Capital and ITOCHU 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 Brockhaus Capital and ITOCHU into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brockhaus Capital Management and ITOCHU, you can compare the effects of market volatilities on Brockhaus Capital and ITOCHU 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 Brockhaus Capital with a short position of ITOCHU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brockhaus Capital and ITOCHU.
Diversification Opportunities for Brockhaus Capital and ITOCHU
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Brockhaus and ITOCHU is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Brockhaus Capital Management and ITOCHU in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITOCHU and Brockhaus Capital 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 Brockhaus Capital Management are associated (or correlated) with ITOCHU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITOCHU has no effect on the direction of Brockhaus Capital i.e., Brockhaus Capital and ITOCHU go up and down completely randomly.
Pair Corralation between Brockhaus Capital and ITOCHU
Assuming the 90 days trading horizon Brockhaus Capital is expected to generate 2.69 times less return on investment than ITOCHU. In addition to that, Brockhaus Capital is 1.51 times more volatile than ITOCHU. It trades about 0.01 of its total potential returns per unit of risk. ITOCHU is currently generating about 0.06 per unit of volatility. If you would invest 2,991 in ITOCHU on September 17, 2024 and sell it today you would earn a total of 1,809 from holding ITOCHU or generate 60.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brockhaus Capital Management vs. ITOCHU
Performance |
| Timeline |
| Brockhaus Capital |
| ITOCHU |
Brockhaus Capital and ITOCHU Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brockhaus Capital and ITOCHU
The main advantage of trading using opposite Brockhaus Capital and ITOCHU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brockhaus Capital position performs unexpectedly, ITOCHU 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 ITOCHU will offset losses from the drop in ITOCHU's long position.| Brockhaus Capital vs. Ameriprise Financial | Brockhaus Capital vs. Ares Management Corp | Brockhaus Capital vs. Superior Plus Corp | Brockhaus Capital vs. SIVERS SEMICONDUCTORS AB |
| ITOCHU vs. Marubeni | ITOCHU vs. Sumitomo | ITOCHU vs. Superior Plus Corp | ITOCHU vs. SIVERS SEMICONDUCTORS AB |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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