Correlation Between Hitachi Metals and QinetiQ Group
Can any of the company-specific risk be diversified away by investing in both Hitachi Metals and QinetiQ Group 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 QinetiQ Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hitachi Metals and QinetiQ Group plc, you can compare the effects of market volatilities on Hitachi Metals and QinetiQ Group 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 QinetiQ Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hitachi Metals and QinetiQ Group.
Diversification Opportunities for Hitachi Metals and QinetiQ Group
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hitachi and QinetiQ is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Hitachi Metals and QinetiQ Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QinetiQ Group plc 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 QinetiQ Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QinetiQ Group plc has no effect on the direction of Hitachi Metals i.e., Hitachi Metals and QinetiQ Group go up and down completely randomly.
Pair Corralation between Hitachi Metals and QinetiQ Group
Assuming the 90 days horizon Hitachi Metals is expected to generate 98.09 times more return on investment than QinetiQ Group. However, Hitachi Metals is 98.09 times more volatile than QinetiQ Group plc. It trades about 0.22 of its potential returns per unit of risk. QinetiQ Group plc is currently generating about 0.05 per unit of risk. If you would invest 1,446 in Hitachi Metals on September 2, 2024 and sell it today you would earn a total of 99,998,554 from holding Hitachi Metals or generate 6915529.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 11.11% |
| Values | Daily Returns |
Hitachi Metals vs. QinetiQ Group plc
Performance |
| Timeline |
| Hitachi Metals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| QinetiQ Group plc |
Hitachi Metals and QinetiQ Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hitachi Metals and QinetiQ Group
The main advantage of trading using opposite Hitachi Metals and QinetiQ Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hitachi Metals position performs unexpectedly, QinetiQ Group 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 QinetiQ Group will offset losses from the drop in QinetiQ Group's long position.| Hitachi Metals vs. BCB Bancorp | Hitachi Metals vs. Ryanair Holdings PLC | Hitachi Metals vs. Hooker Furniture | Hitachi Metals vs. Lindblad Expeditions Holdings |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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