Correlation Between China BlueChemical and SHIN ETSU
Can any of the company-specific risk be diversified away by investing in both China BlueChemical 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 China BlueChemical and SHIN ETSU into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China BlueChemical and SHIN ETSU CHEMICAL, you can compare the effects of market volatilities on China BlueChemical 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 China BlueChemical with a short position of SHIN ETSU. Check out your portfolio center. Please also check ongoing floating volatility patterns of China BlueChemical and SHIN ETSU.
Diversification Opportunities for China BlueChemical and SHIN ETSU
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and SHIN is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding China BlueChemical and SHIN ETSU CHEMICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHIN ETSU CHEMICAL and China BlueChemical 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 China BlueChemical 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 China BlueChemical i.e., China BlueChemical and SHIN ETSU go up and down completely randomly.
Pair Corralation between China BlueChemical and SHIN ETSU
Assuming the 90 days horizon China BlueChemical is expected to generate 2.19 times more return on investment than SHIN ETSU. However, China BlueChemical is 2.19 times more volatile than SHIN ETSU CHEMICAL. It trades about 0.02 of its potential returns per unit of risk. SHIN ETSU CHEMICAL is currently generating about -0.22 per unit of risk. If you would invest 25.00 in China BlueChemical on September 19, 2024 and sell it today you would earn a total of 0.00 from holding China BlueChemical or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China BlueChemical vs. SHIN ETSU CHEMICAL
Performance |
| Timeline |
| China BlueChemical |
| SHIN ETSU CHEMICAL |
China BlueChemical and SHIN ETSU Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China BlueChemical and SHIN ETSU
The main advantage of trading using opposite China BlueChemical and SHIN ETSU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China BlueChemical 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.| China BlueChemical vs. Nissan Chemical Corp | China BlueChemical vs. UNITED RENTALS | China BlueChemical vs. PTT Global Chemical | China BlueChemical vs. MAVEN WIRELESS SWEDEN |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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