Correlation Between City Of and Shimano
Can any of the company-specific risk be diversified away by investing in both City Of and Shimano 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 City Of and Shimano into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The City of and Shimano, you can compare the effects of market volatilities on City Of and Shimano 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 City Of with a short position of Shimano. Check out your portfolio center. Please also check ongoing floating volatility patterns of City Of and Shimano.
Diversification Opportunities for City Of and Shimano
Modest diversification
The 3 months correlation between City and Shimano is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding The City of and Shimano in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shimano and City Of 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 The City of are associated (or correlated) with Shimano. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shimano has no effect on the direction of City Of i.e., City Of and Shimano go up and down completely randomly.
Pair Corralation between City Of and Shimano
Assuming the 90 days horizon The City of is expected to generate 0.85 times more return on investment than Shimano. However, The City of is 1.18 times less risky than Shimano. It trades about 0.04 of its potential returns per unit of risk. Shimano is currently generating about -0.25 per unit of risk. If you would invest 515.00 in The City of on August 28, 2024 and sell it today you would earn a total of 10.00 from holding The City of or generate 1.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The City of vs. Shimano
Performance |
| Timeline |
| The City |
| Shimano |
City Of and Shimano Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City Of and Shimano
The main advantage of trading using opposite City Of and Shimano positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City Of position performs unexpectedly, Shimano 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 Shimano will offset losses from the drop in Shimano's long position.| City Of vs. Spirent Communications plc | City Of vs. Iridium Communications | City Of vs. Highlight Communications AG | City Of vs. RYU Apparel |
| Shimano vs. NH HOTEL GROUP | Shimano vs. SLR Investment Corp | Shimano vs. The City of | Shimano vs. ECHO INVESTMENT ZY |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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