Correlation Between Hitachi Construction and JERONIMO MARTINS
Can any of the company-specific risk be diversified away by investing in both Hitachi Construction and JERONIMO MARTINS 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 JERONIMO MARTINS 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 JERONIMO MARTINS UNADR2, you can compare the effects of market volatilities on Hitachi Construction and JERONIMO MARTINS 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 JERONIMO MARTINS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hitachi Construction and JERONIMO MARTINS.
Diversification Opportunities for Hitachi Construction and JERONIMO MARTINS
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hitachi and JERONIMO is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Hitachi Construction Machinery and JERONIMO MARTINS UNADR2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JERONIMO MARTINS UNADR2 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 JERONIMO MARTINS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JERONIMO MARTINS UNADR2 has no effect on the direction of Hitachi Construction i.e., Hitachi Construction and JERONIMO MARTINS go up and down completely randomly.
Pair Corralation between Hitachi Construction and JERONIMO MARTINS
Assuming the 90 days horizon Hitachi Construction is expected to generate 1.21 times less return on investment than JERONIMO MARTINS. In addition to that, Hitachi Construction is 1.08 times more volatile than JERONIMO MARTINS UNADR2. It trades about 0.01 of its total potential returns per unit of risk. JERONIMO MARTINS UNADR2 is currently generating about 0.01 per unit of volatility. If you would invest 3,561 in JERONIMO MARTINS UNADR2 on October 13, 2024 and sell it today you would earn a total of 39.00 from holding JERONIMO MARTINS UNADR2 or generate 1.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Hitachi Construction Machinery vs. JERONIMO MARTINS UNADR2
Performance |
| Timeline |
| Hitachi Construction |
| JERONIMO MARTINS UNADR2 |
Hitachi Construction and JERONIMO MARTINS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hitachi Construction and JERONIMO MARTINS
The main advantage of trading using opposite Hitachi Construction and JERONIMO MARTINS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hitachi Construction position performs unexpectedly, JERONIMO MARTINS 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 JERONIMO MARTINS will offset losses from the drop in JERONIMO MARTINS's long position.| Hitachi Construction vs. Rogers Communications | Hitachi Construction vs. Ribbon Communications | Hitachi Construction vs. Verizon Communications | Hitachi Construction vs. Thai Beverage Public |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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