Correlation Between Hitachi and Seaboard
Can any of the company-specific risk be diversified away by investing in both Hitachi and Seaboard 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 and Seaboard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hitachi and Seaboard, you can compare the effects of market volatilities on Hitachi and Seaboard 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 with a short position of Seaboard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hitachi and Seaboard.
Diversification Opportunities for Hitachi and Seaboard
Good diversification
The 3 months correlation between Hitachi and Seaboard is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Hitachi and Seaboard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seaboard and Hitachi 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 are associated (or correlated) with Seaboard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seaboard has no effect on the direction of Hitachi i.e., Hitachi and Seaboard go up and down completely randomly.
Pair Corralation between Hitachi and Seaboard
Assuming the 90 days trading horizon Hitachi is expected to generate 1.81 times more return on investment than Seaboard. However, Hitachi is 1.81 times more volatile than Seaboard. It trades about 0.03 of its potential returns per unit of risk. Seaboard is currently generating about -0.29 per unit of risk. If you would invest 2,359 in Hitachi on September 24, 2024 and sell it today you would earn a total of 20.00 from holding Hitachi or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hitachi vs. Seaboard
Performance |
| Timeline |
| Hitachi |
| Seaboard |
Hitachi and Seaboard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hitachi and Seaboard
The main advantage of trading using opposite Hitachi and Seaboard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hitachi position performs unexpectedly, Seaboard 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 Seaboard will offset losses from the drop in Seaboard's long position.| Hitachi vs. Honeywell International | Hitachi vs. Mitsubishi | Hitachi vs. ITOCHU | Hitachi vs. CITIC Limited |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |