Correlation Between Hitachi Metals and Shenzhen Investment
Can any of the company-specific risk be diversified away by investing in both Hitachi Metals and Shenzhen Investment 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 Shenzhen Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hitachi Metals and Shenzhen Investment Holdings, you can compare the effects of market volatilities on Hitachi Metals and Shenzhen Investment 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 Shenzhen Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hitachi Metals and Shenzhen Investment.
Diversification Opportunities for Hitachi Metals and Shenzhen Investment
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hitachi and Shenzhen is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Hitachi Metals and Shenzhen Investment Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Investment 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 Shenzhen Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Investment has no effect on the direction of Hitachi Metals i.e., Hitachi Metals and Shenzhen Investment go up and down completely randomly.
Pair Corralation between Hitachi Metals and Shenzhen Investment
If you would invest 12.00 in Shenzhen Investment Holdings on September 1, 2024 and sell it today you would earn a total of 10.00 from holding Shenzhen Investment Holdings or generate 83.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.79% |
| Values | Daily Returns |
Hitachi Metals vs. Shenzhen Investment Holdings
Performance |
| Timeline |
| Hitachi Metals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Shenzhen Investment |
Hitachi Metals and Shenzhen Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hitachi Metals and Shenzhen Investment
The main advantage of trading using opposite Hitachi Metals and Shenzhen Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hitachi Metals position performs unexpectedly, Shenzhen Investment 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 Shenzhen Investment will offset losses from the drop in Shenzhen Investment's long position.| Hitachi Metals vs. Asure Software | Hitachi Metals vs. WPP PLC ADR | Hitachi Metals vs. Arrow Electronics | Hitachi Metals vs. Lipocine |
| Shenzhen Investment vs. Verra Mobility Corp | Shenzhen Investment vs. HUMANA INC | Shenzhen Investment vs. SCOR PK | Shenzhen Investment vs. Aquagold International |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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