Correlation Between CHINA EDUCATION and Sekisui Chemical
Can any of the company-specific risk be diversified away by investing in both CHINA EDUCATION 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 CHINA EDUCATION and Sekisui Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA EDUCATION GROUP and Sekisui Chemical Co, you can compare the effects of market volatilities on CHINA EDUCATION 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 CHINA EDUCATION with a short position of Sekisui Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA EDUCATION and Sekisui Chemical.
Diversification Opportunities for CHINA EDUCATION and Sekisui Chemical
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CHINA and Sekisui is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding CHINA EDUCATION GROUP and Sekisui Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sekisui Chemical and CHINA EDUCATION 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 CHINA EDUCATION GROUP 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 CHINA EDUCATION i.e., CHINA EDUCATION and Sekisui Chemical go up and down completely randomly.
Pair Corralation between CHINA EDUCATION and Sekisui Chemical
Assuming the 90 days horizon CHINA EDUCATION GROUP is expected to under-perform the Sekisui Chemical. But the stock apears to be less risky and, when comparing its historical volatility, CHINA EDUCATION GROUP is 1.61 times less risky than Sekisui Chemical. The stock trades about -0.33 of its potential returns per unit of risk. The Sekisui Chemical Co is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,480 in Sekisui Chemical Co on October 11, 2024 and sell it today you would earn a total of 130.00 from holding Sekisui Chemical Co or generate 8.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
CHINA EDUCATION GROUP vs. Sekisui Chemical Co
Performance |
| Timeline |
| CHINA EDUCATION GROUP |
| Sekisui Chemical |
CHINA EDUCATION and Sekisui Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA EDUCATION and Sekisui Chemical
The main advantage of trading using opposite CHINA EDUCATION and Sekisui Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA EDUCATION 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.| CHINA EDUCATION vs. Taiwan Semiconductor Manufacturing | CHINA EDUCATION vs. ELMOS SEMICONDUCTOR | CHINA EDUCATION vs. RCS MediaGroup SpA | CHINA EDUCATION vs. Nexstar Media Group |
| Sekisui Chemical vs. SEKISUI CHEMICAL | Sekisui Chemical vs. BJs Restaurants | Sekisui Chemical vs. X FAB Silicon Foundries | Sekisui Chemical vs. SWISS WATER DECAFFCOFFEE |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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