Correlation Between ANGANG STEEL and Sekisui Chemical
Can any of the company-specific risk be diversified away by investing in both ANGANG STEEL 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 ANGANG STEEL and Sekisui Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANGANG STEEL H and Sekisui Chemical Co, you can compare the effects of market volatilities on ANGANG STEEL 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 ANGANG STEEL with a short position of Sekisui Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGANG STEEL and Sekisui Chemical.
Diversification Opportunities for ANGANG STEEL and Sekisui Chemical
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between ANGANG and Sekisui is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding ANGANG STEEL H and Sekisui Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sekisui Chemical and ANGANG STEEL 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 ANGANG STEEL H 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 ANGANG STEEL i.e., ANGANG STEEL and Sekisui Chemical go up and down completely randomly.
Pair Corralation between ANGANG STEEL and Sekisui Chemical
Assuming the 90 days trading horizon ANGANG STEEL H is expected to generate 1.37 times more return on investment than Sekisui Chemical. However, ANGANG STEEL is 1.37 times more volatile than Sekisui Chemical Co. It trades about 0.06 of its potential returns per unit of risk. Sekisui Chemical Co is currently generating about 0.0 per unit of risk. If you would invest 17.00 in ANGANG STEEL H on October 30, 2024 and sell it today you would earn a total of 1.00 from holding ANGANG STEEL H or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANGANG STEEL H vs. Sekisui Chemical Co
Performance |
| Timeline |
| ANGANG STEEL H |
| Sekisui Chemical |
ANGANG STEEL and Sekisui Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANGANG STEEL and Sekisui Chemical
The main advantage of trading using opposite ANGANG STEEL and Sekisui Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANGANG STEEL 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.| ANGANG STEEL vs. Canadian Utilities Limited | ANGANG STEEL vs. SPARTAN STORES | ANGANG STEEL vs. JIAHUA STORES | ANGANG STEEL vs. BJs Wholesale Club |
| Sekisui Chemical vs. China Datang | Sekisui Chemical vs. Indutrade AB | Sekisui Chemical vs. Alibaba Health Information | Sekisui Chemical vs. CarsalesCom |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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