Correlation Between Hitachi Construction and T.J. Maxx
Can any of the company-specific risk be diversified away by investing in both Hitachi Construction and T.J. Maxx 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 T.J. Maxx 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 The TJX Companies, you can compare the effects of market volatilities on Hitachi Construction and T.J. Maxx 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 T.J. Maxx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hitachi Construction and T.J. Maxx.
Diversification Opportunities for Hitachi Construction and T.J. Maxx
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hitachi and T.J. is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Hitachi Construction Machinery and The TJX Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TJX Companies 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 T.J. Maxx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TJX Companies has no effect on the direction of Hitachi Construction i.e., Hitachi Construction and T.J. Maxx go up and down completely randomly.
Pair Corralation between Hitachi Construction and T.J. Maxx
Assuming the 90 days horizon Hitachi Construction is expected to generate 7.73 times less return on investment than T.J. Maxx. In addition to that, Hitachi Construction is 1.61 times more volatile than The TJX Companies. It trades about 0.01 of its total potential returns per unit of risk. The TJX Companies is currently generating about 0.09 per unit of volatility. If you would invest 7,233 in The TJX Companies on August 30, 2024 and sell it today you would earn a total of 4,777 from holding The TJX Companies or generate 66.04% 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. The TJX Companies
Performance |
| Timeline |
| Hitachi Construction |
| TJX Companies |
Hitachi Construction and T.J. Maxx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hitachi Construction and T.J. Maxx
The main advantage of trading using opposite Hitachi Construction and T.J. Maxx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hitachi Construction position performs unexpectedly, T.J. Maxx 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 T.J. Maxx will offset losses from the drop in T.J. Maxx's long position.| Hitachi Construction vs. CNH Industrial NV | Hitachi Construction vs. Terex | Hitachi Construction vs. Superior Plus Corp | Hitachi Construction vs. NMI Holdings |
| T.J. Maxx vs. NEXT plc | T.J. Maxx vs. The Gap | T.J. Maxx vs. American Eagle Outfitters | T.J. Maxx vs. Superior Plus Corp |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |