Correlation Between Flexible Solutions and Hitachi Metals
Can any of the company-specific risk be diversified away by investing in both Flexible Solutions and Hitachi Metals 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 Flexible Solutions and Hitachi Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flexible Solutions International and Hitachi Metals, you can compare the effects of market volatilities on Flexible Solutions and Hitachi Metals 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 Flexible Solutions with a short position of Hitachi Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flexible Solutions and Hitachi Metals.
Diversification Opportunities for Flexible Solutions and Hitachi Metals
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Flexible and Hitachi is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Flexible Solutions Internation and Hitachi Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hitachi Metals and Flexible Solutions 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 Flexible Solutions International are associated (or correlated) with Hitachi Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hitachi Metals has no effect on the direction of Flexible Solutions i.e., Flexible Solutions and Hitachi Metals go up and down completely randomly.
Pair Corralation between Flexible Solutions and Hitachi Metals
Considering the 90-day investment horizon Flexible Solutions International is expected to generate 0.42 times more return on investment than Hitachi Metals. However, Flexible Solutions International is 2.36 times less risky than Hitachi Metals. It trades about 0.05 of its potential returns per unit of risk. Hitachi Metals is currently generating about -0.12 per unit of risk. If you would invest 301.00 in Flexible Solutions International on October 26, 2024 and sell it today you would earn a total of 300.00 from holding Flexible Solutions International or generate 99.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 13.56% |
| Values | Daily Returns |
Flexible Solutions Internation vs. Hitachi Metals
Performance |
| Timeline |
| Flexible Solutions |
| Hitachi Metals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Flexible Solutions and Hitachi Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flexible Solutions and Hitachi Metals
The main advantage of trading using opposite Flexible Solutions and Hitachi Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flexible Solutions position performs unexpectedly, Hitachi Metals 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 Hitachi Metals will offset losses from the drop in Hitachi Metals' long position.| Flexible Solutions vs. Orion Engineered Carbons | Flexible Solutions vs. International Flavors Fragrances | Flexible Solutions vs. Sociedad Quimica y | Flexible Solutions vs. Albemarle Corp |
| Hitachi Metals vs. Primo Brands | Hitachi Metals vs. Sysco | Hitachi Metals vs. SunOpta | Hitachi Metals vs. WK Kellogg Co |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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