Correlation Between Lixil Group and Teijin
Can any of the company-specific risk be diversified away by investing in both Lixil Group and Teijin 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 Lixil Group and Teijin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lixil Group Corp and Teijin, you can compare the effects of market volatilities on Lixil Group and Teijin 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 Lixil Group with a short position of Teijin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lixil Group and Teijin.
Diversification Opportunities for Lixil Group and Teijin
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lixil and Teijin is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Lixil Group Corp and Teijin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teijin and Lixil Group 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 Lixil Group Corp are associated (or correlated) with Teijin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teijin has no effect on the direction of Lixil Group i.e., Lixil Group and Teijin go up and down completely randomly.
Pair Corralation between Lixil Group and Teijin
Assuming the 90 days horizon Lixil Group Corp is expected to generate 1.36 times more return on investment than Teijin. However, Lixil Group is 1.36 times more volatile than Teijin. It trades about 0.25 of its potential returns per unit of risk. Teijin is currently generating about -0.19 per unit of risk. If you would invest 2,097 in Lixil Group Corp on August 27, 2024 and sell it today you would earn a total of 186.00 from holding Lixil Group Corp or generate 8.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lixil Group Corp vs. Teijin
Performance |
| Timeline |
| Lixil Group Corp |
| Teijin |
Lixil Group and Teijin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lixil Group and Teijin
The main advantage of trading using opposite Lixil Group and Teijin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lixil Group position performs unexpectedly, Teijin 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 Teijin will offset losses from the drop in Teijin's long position.| Lixil Group vs. Masco | Lixil Group vs. Carrier Global Corp | Lixil Group vs. Daikin IndustriesLtd | Lixil Group vs. Lennox International |
| Teijin vs. Toray Industries ADR | Teijin vs. Nitto Denko Corp | Teijin vs. NSK Ltd ADR | Teijin vs. Secom Co Ltd |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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