Correlation Between Eisai and SBI Holdings
Can any of the company-specific risk be diversified away by investing in both Eisai and SBI Holdings 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 Eisai and SBI Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eisai Co and SBI Holdings, you can compare the effects of market volatilities on Eisai and SBI Holdings 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 Eisai with a short position of SBI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eisai and SBI Holdings.
Diversification Opportunities for Eisai and SBI Holdings
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eisai and SBI is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Eisai Co and SBI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Holdings and Eisai 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 Eisai Co are associated (or correlated) with SBI Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Holdings has no effect on the direction of Eisai i.e., Eisai and SBI Holdings go up and down completely randomly.
Pair Corralation between Eisai and SBI Holdings
Assuming the 90 days horizon Eisai Co is expected to generate 1.31 times more return on investment than SBI Holdings. However, Eisai is 1.31 times more volatile than SBI Holdings. It trades about 0.1 of its potential returns per unit of risk. SBI Holdings is currently generating about 0.06 per unit of risk. If you would invest 2,618 in Eisai Co on October 26, 2024 and sell it today you would earn a total of 106.00 from holding Eisai Co or generate 4.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eisai Co vs. SBI Holdings
Performance |
| Timeline |
| Eisai |
| SBI Holdings |
Eisai and SBI Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eisai and SBI Holdings
The main advantage of trading using opposite Eisai and SBI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eisai position performs unexpectedly, SBI Holdings 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 SBI Holdings will offset losses from the drop in SBI Holdings' long position.| Eisai vs. WT OFFSHORE | Eisai vs. CSSC Offshore Marine | Eisai vs. Laureate Education | Eisai vs. EIDESVIK OFFSHORE NK |
| SBI Holdings vs. PICKN PAY STORES | SBI Holdings vs. DEVRY EDUCATION GRP | SBI Holdings vs. CHINA EDUCATION GROUP | SBI Holdings vs. COSTCO WHOLESALE CDR |
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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