Correlation Between S-E BANKEN and CHIBA BANK
Can any of the company-specific risk be diversified away by investing in both S-E BANKEN and CHIBA BANK 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 S-E BANKEN and CHIBA BANK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between S E BANKEN A and CHIBA BANK, you can compare the effects of market volatilities on S-E BANKEN and CHIBA BANK 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 S-E BANKEN with a short position of CHIBA BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of S-E BANKEN and CHIBA BANK.
Diversification Opportunities for S-E BANKEN and CHIBA BANK
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between S-E and CHIBA is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding S E BANKEN A and CHIBA BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHIBA BANK and S-E BANKEN 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 S E BANKEN A are associated (or correlated) with CHIBA BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHIBA BANK has no effect on the direction of S-E BANKEN i.e., S-E BANKEN and CHIBA BANK go up and down completely randomly.
Pair Corralation between S-E BANKEN and CHIBA BANK
Assuming the 90 days trading horizon S E BANKEN A is expected to generate 0.81 times more return on investment than CHIBA BANK. However, S E BANKEN A is 1.24 times less risky than CHIBA BANK. It trades about 0.07 of its potential returns per unit of risk. CHIBA BANK is currently generating about 0.04 per unit of risk. If you would invest 988.00 in S E BANKEN A on November 9, 2024 and sell it today you would earn a total of 396.00 from holding S E BANKEN A or generate 40.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
S E BANKEN A vs. CHIBA BANK
Performance |
| Timeline |
| S E BANKEN |
| CHIBA BANK |
S-E BANKEN and CHIBA BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with S-E BANKEN and CHIBA BANK
The main advantage of trading using opposite S-E BANKEN and CHIBA BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if S-E BANKEN position performs unexpectedly, CHIBA BANK 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 CHIBA BANK will offset losses from the drop in CHIBA BANK's long position.| S-E BANKEN vs. Global Ship Lease | S-E BANKEN vs. Sumitomo Mitsui Construction | S-E BANKEN vs. WILLIS LEASE FIN | S-E BANKEN vs. WIMFARM SA EO |
| CHIBA BANK vs. Firan Technology Group | CHIBA BANK vs. Siemens Healthineers AG | CHIBA BANK vs. Align Technology | CHIBA BANK vs. UPDATE SOFTWARE |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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