Correlation Between Hitachi Construction and Postal Savings
Can any of the company-specific risk be diversified away by investing in both Hitachi Construction and Postal Savings 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 Hitachi Construction and Postal Savings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hitachi Construction Machinery and Postal Savings Bank, you can compare the effects of market volatilities on Hitachi Construction and Postal Savings 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 Hitachi Construction with a short position of Postal Savings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hitachi Construction and Postal Savings.
Diversification Opportunities for Hitachi Construction and Postal Savings
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hitachi and Postal is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Hitachi Construction Machinery and Postal Savings Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Postal Savings Bank and Hitachi Construction 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 Hitachi Construction Machinery are associated (or correlated) with Postal Savings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Postal Savings Bank has no effect on the direction of Hitachi Construction i.e., Hitachi Construction and Postal Savings go up and down completely randomly.
Pair Corralation between Hitachi Construction and Postal Savings
Assuming the 90 days horizon Hitachi Construction Machinery is expected to generate 1.31 times more return on investment than Postal Savings. However, Hitachi Construction is 1.31 times more volatile than Postal Savings Bank. It trades about -0.01 of its potential returns per unit of risk. Postal Savings Bank is currently generating about -0.03 per unit of risk. If you would invest 2,040 in Hitachi Construction Machinery on August 25, 2024 and sell it today you would lose (20.00) from holding Hitachi Construction Machinery or give up 0.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hitachi Construction Machinery vs. Postal Savings Bank
Performance |
| Timeline |
| Hitachi Construction |
| Postal Savings Bank |
Hitachi Construction and Postal Savings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hitachi Construction and Postal Savings
The main advantage of trading using opposite Hitachi Construction and Postal Savings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hitachi Construction position performs unexpectedly, Postal Savings 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 Postal Savings will offset losses from the drop in Postal Savings' long position.| Hitachi Construction vs. KUBOTA P ADR20 | Hitachi Construction vs. Superior Plus Corp | Hitachi Construction vs. NMI Holdings | Hitachi Construction vs. Origin Agritech |
| Postal Savings vs. Deutsche Bank Aktiengesellschaft | Postal Savings vs. Superior Plus Corp | Postal Savings vs. NMI Holdings | Postal Savings vs. Origin Agritech |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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