Correlation Between Hitachi Metals and Orsted A/S
Can any of the company-specific risk be diversified away by investing in both Hitachi Metals and Orsted A/S 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 Metals and Orsted A/S into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hitachi Metals and Orsted AS, you can compare the effects of market volatilities on Hitachi Metals and Orsted A/S 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 Metals with a short position of Orsted A/S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hitachi Metals and Orsted A/S.
Diversification Opportunities for Hitachi Metals and Orsted A/S
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hitachi and Orsted is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Hitachi Metals and Orsted AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orsted A/S and Hitachi Metals 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 Metals are associated (or correlated) with Orsted A/S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orsted A/S has no effect on the direction of Hitachi Metals i.e., Hitachi Metals and Orsted A/S go up and down completely randomly.
Pair Corralation between Hitachi Metals and Orsted A/S
If you would invest 100,000,000 in Hitachi Metals on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Hitachi Metals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Hitachi Metals vs. Orsted AS
Performance |
| Timeline |
| Hitachi Metals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Orsted A/S |
Hitachi Metals and Orsted A/S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hitachi Metals and Orsted A/S
The main advantage of trading using opposite Hitachi Metals and Orsted A/S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hitachi Metals position performs unexpectedly, Orsted A/S 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 Orsted A/S will offset losses from the drop in Orsted A/S's long position.| Hitachi Metals vs. Cedar Realty Trust | Hitachi Metals vs. LB Foster | Hitachi Metals vs. Timken Company | Hitachi Metals vs. Coupang LLC |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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