Correlation Between Huntsman and Shin Etsu
Can any of the company-specific risk be diversified away by investing in both Huntsman and Shin Etsu 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 Huntsman and Shin Etsu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huntsman and Shin Etsu Chemical Co, you can compare the effects of market volatilities on Huntsman and Shin Etsu 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 Huntsman with a short position of Shin Etsu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huntsman and Shin Etsu.
Diversification Opportunities for Huntsman and Shin Etsu
Very weak diversification
The 3 months correlation between Huntsman and Shin is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Huntsman and Shin Etsu Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Etsu Chemical and Huntsman 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 Huntsman are associated (or correlated) with Shin Etsu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Etsu Chemical has no effect on the direction of Huntsman i.e., Huntsman and Shin Etsu go up and down completely randomly.
Pair Corralation between Huntsman and Shin Etsu
Considering the 90-day investment horizon Huntsman is expected to under-perform the Shin Etsu. But the stock apears to be less risky and, when comparing its historical volatility, Huntsman is 1.06 times less risky than Shin Etsu. The stock trades about -0.02 of its potential returns per unit of risk. The Shin Etsu Chemical Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,275 in Shin Etsu Chemical Co on August 24, 2024 and sell it today you would earn a total of 540.00 from holding Shin Etsu Chemical Co or generate 42.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huntsman vs. Shin Etsu Chemical Co
Performance |
| Timeline |
| Huntsman |
| Shin Etsu Chemical |
Huntsman and Shin Etsu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huntsman and Shin Etsu
The main advantage of trading using opposite Huntsman and Shin Etsu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huntsman position performs unexpectedly, Shin Etsu 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 Shin Etsu will offset losses from the drop in Shin Etsu's long position.| Huntsman vs. Valhi Inc | Huntsman vs. Lsb Industries | Huntsman vs. Westlake Chemical Partners | Huntsman vs. Braskem SA Class |
| Shin Etsu vs. BASF SE NA | Shin Etsu vs. BASF SE ADR | Shin Etsu vs. Braskem SA Class | Shin Etsu vs. Celanese |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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