Correlation Between Furukawa Electric and Shin Etsu
Can any of the company-specific risk be diversified away by investing in both Furukawa Electric and Shin Etsu 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 Furukawa Electric and Shin Etsu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Furukawa Electric Co and Shin Etsu Chemical Co, you can compare the effects of market volatilities on Furukawa Electric and Shin Etsu 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 Furukawa Electric with a short position of Shin Etsu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Furukawa Electric and Shin Etsu.
Diversification Opportunities for Furukawa Electric and Shin Etsu
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Furukawa and Shin is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Furukawa Electric Co and Shin Etsu Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Etsu Chemical and Furukawa Electric 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 Furukawa Electric Co are associated (or correlated) with Shin Etsu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Etsu Chemical has no effect on the direction of Furukawa Electric i.e., Furukawa Electric and Shin Etsu go up and down completely randomly.
Pair Corralation between Furukawa Electric and Shin Etsu
Assuming the 90 days horizon Furukawa Electric Co is expected to generate 1.0 times more return on investment than Shin Etsu. However, Furukawa Electric is 1.0 times more volatile than Shin Etsu Chemical Co. It trades about 0.14 of its potential returns per unit of risk. Shin Etsu Chemical Co is currently generating about -0.02 per unit of risk. If you would invest 2,749 in Furukawa Electric Co on August 28, 2024 and sell it today you would earn a total of 1,051 from holding Furukawa Electric Co or generate 38.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Furukawa Electric Co vs. Shin Etsu Chemical Co
Performance |
| Timeline |
| Furukawa Electric |
| Shin Etsu Chemical |
Furukawa Electric and Shin Etsu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Furukawa Electric and Shin Etsu
The main advantage of trading using opposite Furukawa Electric and Shin Etsu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Furukawa Electric position performs unexpectedly, Shin Etsu 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 Shin Etsu will offset losses from the drop in Shin Etsu's long position.| Furukawa Electric vs. FREYR Battery SA | Furukawa Electric vs. nVent Electric PLC | Furukawa Electric vs. Hubbell | Furukawa Electric vs. Advanced Energy Industries |
| Shin Etsu vs. Kuraray Co | Shin Etsu vs. Mitsubishi Chemical Holdings | Shin Etsu vs. Sumitomo Chemical Co | Shin Etsu vs. Valhi Inc |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |