Correlation Between MIRAMAR HOTEL and Sumitomo Chemical
Can any of the company-specific risk be diversified away by investing in both MIRAMAR HOTEL and Sumitomo 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 MIRAMAR HOTEL and Sumitomo Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MIRAMAR HOTEL INV and Sumitomo Chemical, you can compare the effects of market volatilities on MIRAMAR HOTEL and Sumitomo 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 MIRAMAR HOTEL with a short position of Sumitomo Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of MIRAMAR HOTEL and Sumitomo Chemical.
Diversification Opportunities for MIRAMAR HOTEL and Sumitomo Chemical
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MIRAMAR and Sumitomo is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding MIRAMAR HOTEL INV and Sumitomo Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumitomo Chemical and MIRAMAR HOTEL 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 MIRAMAR HOTEL INV are associated (or correlated) with Sumitomo Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumitomo Chemical has no effect on the direction of MIRAMAR HOTEL i.e., MIRAMAR HOTEL and Sumitomo Chemical go up and down completely randomly.
Pair Corralation between MIRAMAR HOTEL and Sumitomo Chemical
Assuming the 90 days trading horizon MIRAMAR HOTEL INV is expected to generate 1.08 times more return on investment than Sumitomo Chemical. However, MIRAMAR HOTEL is 1.08 times more volatile than Sumitomo Chemical. It trades about 0.06 of its potential returns per unit of risk. Sumitomo Chemical is currently generating about -0.02 per unit of risk. If you would invest 55.00 in MIRAMAR HOTEL INV on September 3, 2024 and sell it today you would earn a total of 57.00 from holding MIRAMAR HOTEL INV or generate 103.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MIRAMAR HOTEL INV vs. Sumitomo Chemical
Performance |
| Timeline |
| MIRAMAR HOTEL INV |
| Sumitomo Chemical |
MIRAMAR HOTEL and Sumitomo Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MIRAMAR HOTEL and Sumitomo Chemical
The main advantage of trading using opposite MIRAMAR HOTEL and Sumitomo Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MIRAMAR HOTEL position performs unexpectedly, Sumitomo 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 Sumitomo Chemical will offset losses from the drop in Sumitomo Chemical's long position.| MIRAMAR HOTEL vs. Liberty Broadband | MIRAMAR HOTEL vs. Broadcom | MIRAMAR HOTEL vs. Gaztransport Technigaz SA | MIRAMAR HOTEL vs. TYSON FOODS A |
| Sumitomo Chemical vs. AIR LIQUIDE ADR | Sumitomo Chemical vs. BASF SE | Sumitomo Chemical vs. BASF SE | Sumitomo Chemical vs. BASF SE |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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