Correlation Between Caltagirone SpA and Hitachi
Can any of the company-specific risk be diversified away by investing in both Caltagirone SpA and Hitachi 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 Caltagirone SpA and Hitachi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caltagirone SpA and Hitachi, you can compare the effects of market volatilities on Caltagirone SpA and Hitachi 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 Caltagirone SpA with a short position of Hitachi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caltagirone SpA and Hitachi.
Diversification Opportunities for Caltagirone SpA and Hitachi
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Caltagirone and Hitachi is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Caltagirone SpA and Hitachi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hitachi and Caltagirone SpA 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 Caltagirone SpA are associated (or correlated) with Hitachi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hitachi has no effect on the direction of Caltagirone SpA i.e., Caltagirone SpA and Hitachi go up and down completely randomly.
Pair Corralation between Caltagirone SpA and Hitachi
Assuming the 90 days trading horizon Caltagirone SpA is expected to generate 1.96 times less return on investment than Hitachi. In addition to that, Caltagirone SpA is 1.61 times more volatile than Hitachi. It trades about 0.07 of its total potential returns per unit of risk. Hitachi is currently generating about 0.22 per unit of volatility. If you would invest 2,247 in Hitachi on September 5, 2024 and sell it today you would earn a total of 293.00 from holding Hitachi or generate 13.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caltagirone SpA vs. Hitachi
Performance |
| Timeline |
| Caltagirone SpA |
| Hitachi |
Caltagirone SpA and Hitachi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caltagirone SpA and Hitachi
The main advantage of trading using opposite Caltagirone SpA and Hitachi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caltagirone SpA position performs unexpectedly, Hitachi 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 Hitachi will offset losses from the drop in Hitachi's long position.| Caltagirone SpA vs. Apple Inc | Caltagirone SpA vs. Apple Inc | Caltagirone SpA vs. Apple Inc | Caltagirone SpA vs. Apple Inc |
| Hitachi vs. GALENA MINING LTD | Hitachi vs. Caltagirone SpA | Hitachi vs. ITALIAN WINE BRANDS | Hitachi vs. Nippon Steel |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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