Correlation Between Hitachi Construction and CRRC
Can any of the company-specific risk be diversified away by investing in both Hitachi Construction and CRRC 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 CRRC 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 CRRC Limited, you can compare the effects of market volatilities on Hitachi Construction and CRRC 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 CRRC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hitachi Construction and CRRC.
Diversification Opportunities for Hitachi Construction and CRRC
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hitachi and CRRC is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Hitachi Construction Machinery and CRRC Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CRRC Limited 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 CRRC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CRRC Limited has no effect on the direction of Hitachi Construction i.e., Hitachi Construction and CRRC go up and down completely randomly.
Pair Corralation between Hitachi Construction and CRRC
If you would invest 1,960 in Hitachi Construction Machinery on September 15, 2024 and sell it today you would earn a total of 220.00 from holding Hitachi Construction Machinery or generate 11.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hitachi Construction Machinery vs. CRRC Limited
Performance |
| Timeline |
| Hitachi Construction |
| CRRC Limited |
Hitachi Construction and CRRC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hitachi Construction and CRRC
The main advantage of trading using opposite Hitachi Construction and CRRC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hitachi Construction position performs unexpectedly, CRRC 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 CRRC will offset losses from the drop in CRRC's long position.| Hitachi Construction vs. Silicon Motion Technology | Hitachi Construction vs. MOVIE GAMES SA | Hitachi Construction vs. Eastman Chemical | Hitachi Construction vs. X FAB Silicon Foundries |
| CRRC vs. GOODYEAR T RUBBER | CRRC vs. Titan Machinery | CRRC vs. Hitachi Construction Machinery | CRRC vs. Daito Trust Construction |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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