Correlation Between Hitachi Metals and Solvay Bank
Can any of the company-specific risk be diversified away by investing in both Hitachi Metals and Solvay Bank 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 Solvay Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hitachi Metals and Solvay Bank Corp, you can compare the effects of market volatilities on Hitachi Metals and Solvay Bank 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 Solvay Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hitachi Metals and Solvay Bank.
Diversification Opportunities for Hitachi Metals and Solvay Bank
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hitachi and Solvay is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Hitachi Metals and Solvay Bank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solvay Bank Corp 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 Solvay Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solvay Bank Corp has no effect on the direction of Hitachi Metals i.e., Hitachi Metals and Solvay Bank go up and down completely randomly.
Pair Corralation between Hitachi Metals and Solvay Bank
If you would invest 2,444 in Solvay Bank Corp on August 29, 2024 and sell it today you would earn a total of 406.00 from holding Solvay Bank Corp or generate 16.61% 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. Solvay Bank Corp
Performance |
| Timeline |
| Hitachi Metals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Solvay Bank Corp |
Hitachi Metals and Solvay Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hitachi Metals and Solvay Bank
The main advantage of trading using opposite Hitachi Metals and Solvay Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hitachi Metals position performs unexpectedly, Solvay Bank 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 Solvay Bank will offset losses from the drop in Solvay Bank's long position.| Hitachi Metals vs. Amgen Inc | Hitachi Metals vs. Alvotech | Hitachi Metals vs. NioCorp Developments Ltd | Hitachi Metals vs. Vita Coco |
| Solvay Bank vs. Invesco High Income | Solvay Bank vs. Blackrock Muniholdings Ny | Solvay Bank vs. Nuveen California Select | Solvay Bank vs. MFS Investment Grade |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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