Correlation Between Hitachi and Sekisui Chemical
Can any of the company-specific risk be diversified away by investing in both Hitachi and Sekisui Chemical 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 Sekisui Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hitachi Ltd ADR and Sekisui Chemical Co, you can compare the effects of market volatilities on Hitachi and Sekisui Chemical 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 Sekisui Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hitachi and Sekisui Chemical.
Diversification Opportunities for Hitachi and Sekisui Chemical
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hitachi and Sekisui is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Hitachi Ltd ADR and Sekisui Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sekisui Chemical 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 Ltd ADR are associated (or correlated) with Sekisui Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sekisui Chemical has no effect on the direction of Hitachi i.e., Hitachi and Sekisui Chemical go up and down completely randomly.
Pair Corralation between Hitachi and Sekisui Chemical
If you would invest 4,887 in Hitachi Ltd ADR on September 3, 2024 and sell it today you would earn a total of 141.00 from holding Hitachi Ltd ADR or generate 2.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hitachi Ltd ADR vs. Sekisui Chemical Co
Performance |
| Timeline |
| Hitachi Ltd ADR |
| Sekisui Chemical |
Hitachi and Sekisui Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hitachi and Sekisui Chemical
The main advantage of trading using opposite Hitachi and Sekisui Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hitachi position performs unexpectedly, Sekisui Chemical 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 Sekisui Chemical will offset losses from the drop in Sekisui Chemical's long position.| Hitachi vs. Teijin | Hitachi vs. Jardine Matheson Holdings | Hitachi vs. Marubeni Corp ADR | Hitachi vs. Mitsubishi Corp |
| Sekisui Chemical vs. Grupo Bimbo SAB | Sekisui Chemical vs. Grupo Financiero Inbursa | Sekisui Chemical vs. Becle SA de | Sekisui Chemical vs. HUMANA INC |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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