Correlation Between SHIN ETSU and National Beverage
Can any of the company-specific risk be diversified away by investing in both SHIN ETSU and National Beverage 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 SHIN ETSU and National Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SHIN ETSU CHEMICAL and National Beverage Corp, you can compare the effects of market volatilities on SHIN ETSU and National Beverage 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 SHIN ETSU with a short position of National Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHIN ETSU and National Beverage.
Diversification Opportunities for SHIN ETSU and National Beverage
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SHIN and National is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding SHIN ETSU CHEMICAL and National Beverage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Beverage Corp and SHIN ETSU 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 SHIN ETSU CHEMICAL are associated (or correlated) with National Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Beverage Corp has no effect on the direction of SHIN ETSU i.e., SHIN ETSU and National Beverage go up and down completely randomly.
Pair Corralation between SHIN ETSU and National Beverage
Assuming the 90 days trading horizon SHIN ETSU is expected to generate 6.58 times less return on investment than National Beverage. But when comparing it to its historical volatility, SHIN ETSU CHEMICAL is 1.06 times less risky than National Beverage. It trades about 0.01 of its potential returns per unit of risk. National Beverage Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,968 in National Beverage Corp on September 3, 2024 and sell it today you would earn a total of 692.00 from holding National Beverage Corp or generate 17.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SHIN ETSU CHEMICAL vs. National Beverage Corp
Performance |
| Timeline |
| SHIN ETSU CHEMICAL |
| National Beverage Corp |
SHIN ETSU and National Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SHIN ETSU and National Beverage
The main advantage of trading using opposite SHIN ETSU and National Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHIN ETSU position performs unexpectedly, National Beverage 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 National Beverage will offset losses from the drop in National Beverage's long position.| SHIN ETSU vs. GigaMedia | SHIN ETSU vs. ULTRA CLEAN HLDGS | SHIN ETSU vs. FRACTAL GAMING GROUP | SHIN ETSU vs. Hochschild Mining plc |
| National Beverage vs. HK Electric Investments | National Beverage vs. United Utilities Group | National Beverage vs. United Internet AG | National Beverage vs. WisdomTree Investments |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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