Correlation Between KINGBOARD CHEMICAL and MARUHA NICHIRO
Can any of the company-specific risk be diversified away by investing in both KINGBOARD CHEMICAL and MARUHA NICHIRO 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 KINGBOARD CHEMICAL and MARUHA NICHIRO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KINGBOARD CHEMICAL and MARUHA NICHIRO, you can compare the effects of market volatilities on KINGBOARD CHEMICAL and MARUHA NICHIRO 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 KINGBOARD CHEMICAL with a short position of MARUHA NICHIRO. Check out your portfolio center. Please also check ongoing floating volatility patterns of KINGBOARD CHEMICAL and MARUHA NICHIRO.
Diversification Opportunities for KINGBOARD CHEMICAL and MARUHA NICHIRO
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KINGBOARD and MARUHA is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding KINGBOARD CHEMICAL and MARUHA NICHIRO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MARUHA NICHIRO and KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL are associated (or correlated) with MARUHA NICHIRO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MARUHA NICHIRO has no effect on the direction of KINGBOARD CHEMICAL i.e., KINGBOARD CHEMICAL and MARUHA NICHIRO go up and down completely randomly.
Pair Corralation between KINGBOARD CHEMICAL and MARUHA NICHIRO
Assuming the 90 days trading horizon KINGBOARD CHEMICAL is expected to under-perform the MARUHA NICHIRO. In addition to that, KINGBOARD CHEMICAL is 1.38 times more volatile than MARUHA NICHIRO. It trades about -0.07 of its total potential returns per unit of risk. MARUHA NICHIRO is currently generating about 0.11 per unit of volatility. If you would invest 1,770 in MARUHA NICHIRO on August 30, 2024 and sell it today you would earn a total of 60.00 from holding MARUHA NICHIRO or generate 3.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KINGBOARD CHEMICAL vs. MARUHA NICHIRO
Performance |
| Timeline |
| KINGBOARD CHEMICAL |
| MARUHA NICHIRO |
KINGBOARD CHEMICAL and MARUHA NICHIRO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KINGBOARD CHEMICAL and MARUHA NICHIRO
The main advantage of trading using opposite KINGBOARD CHEMICAL and MARUHA NICHIRO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KINGBOARD CHEMICAL position performs unexpectedly, MARUHA NICHIRO 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 MARUHA NICHIRO will offset losses from the drop in MARUHA NICHIRO's long position.| KINGBOARD CHEMICAL vs. Apple Inc | KINGBOARD CHEMICAL vs. Apple Inc | KINGBOARD CHEMICAL vs. Superior Plus Corp | KINGBOARD CHEMICAL vs. SIVERS SEMICONDUCTORS AB |
| MARUHA NICHIRO vs. National Retail Properties | MARUHA NICHIRO vs. AUTO TRADER ADR | MARUHA NICHIRO vs. Salesforce | MARUHA NICHIRO vs. NISSAN CHEMICAL IND |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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