Correlation Between Nine Dragons and Shionogi
Can any of the company-specific risk be diversified away by investing in both Nine Dragons and Shionogi 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 Nine Dragons and Shionogi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nine Dragons Paper and Shionogi Co, you can compare the effects of market volatilities on Nine Dragons and Shionogi 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 Nine Dragons with a short position of Shionogi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nine Dragons and Shionogi.
Diversification Opportunities for Nine Dragons and Shionogi
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nine and Shionogi is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Nine Dragons Paper and Shionogi Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shionogi and Nine Dragons 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 Nine Dragons Paper are associated (or correlated) with Shionogi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shionogi has no effect on the direction of Nine Dragons i.e., Nine Dragons and Shionogi go up and down completely randomly.
Pair Corralation between Nine Dragons and Shionogi
Assuming the 90 days horizon Nine Dragons Paper is expected to generate 0.96 times more return on investment than Shionogi. However, Nine Dragons Paper is 1.04 times less risky than Shionogi. It trades about -0.09 of its potential returns per unit of risk. Shionogi Co is currently generating about -0.18 per unit of risk. If you would invest 39.00 in Nine Dragons Paper on August 30, 2024 and sell it today you would lose (2.00) from holding Nine Dragons Paper or give up 5.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nine Dragons Paper vs. Shionogi Co
Performance |
| Timeline |
| Nine Dragons Paper |
| Shionogi |
Nine Dragons and Shionogi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nine Dragons and Shionogi
The main advantage of trading using opposite Nine Dragons and Shionogi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nine Dragons position performs unexpectedly, Shionogi 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 Shionogi will offset losses from the drop in Shionogi's long position.| Nine Dragons vs. CapitaLand Investment Limited | Nine Dragons vs. REINET INVESTMENTS SCA | Nine Dragons vs. HK Electric Investments | Nine Dragons vs. SLR Investment Corp |
| Shionogi vs. Superior Plus Corp | Shionogi vs. NMI Holdings | Shionogi vs. SIVERS SEMICONDUCTORS AB | Shionogi vs. Talanx AG |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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