Correlation Between SHIN ETSU and ADRIATIC METALS
Can any of the company-specific risk be diversified away by investing in both SHIN ETSU and ADRIATIC METALS 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 ADRIATIC METALS 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 ADRIATIC METALS LS 013355, you can compare the effects of market volatilities on SHIN ETSU and ADRIATIC METALS 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 ADRIATIC METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHIN ETSU and ADRIATIC METALS.
Diversification Opportunities for SHIN ETSU and ADRIATIC METALS
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SHIN and ADRIATIC is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding SHIN ETSU CHEMICAL and ADRIATIC METALS LS 013355 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADRIATIC METALS LS 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 ADRIATIC METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADRIATIC METALS LS has no effect on the direction of SHIN ETSU i.e., SHIN ETSU and ADRIATIC METALS go up and down completely randomly.
Pair Corralation between SHIN ETSU and ADRIATIC METALS
Assuming the 90 days trading horizon SHIN ETSU CHEMICAL is expected to under-perform the ADRIATIC METALS. But the stock apears to be less risky and, when comparing its historical volatility, SHIN ETSU CHEMICAL is 3.2 times less risky than ADRIATIC METALS. The stock trades about -0.17 of its potential returns per unit of risk. The ADRIATIC METALS LS 013355 is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 232.00 in ADRIATIC METALS LS 013355 on December 1, 2024 and sell it today you would earn a total of 20.00 from holding ADRIATIC METALS LS 013355 or generate 8.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SHIN ETSU CHEMICAL vs. ADRIATIC METALS LS 013355
Performance |
| Timeline |
| SHIN ETSU CHEMICAL |
| ADRIATIC METALS LS |
SHIN ETSU and ADRIATIC METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SHIN ETSU and ADRIATIC METALS
The main advantage of trading using opposite SHIN ETSU and ADRIATIC METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHIN ETSU position performs unexpectedly, ADRIATIC METALS 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 ADRIATIC METALS will offset losses from the drop in ADRIATIC METALS's long position.| SHIN ETSU vs. Jacquet Metal Service | SHIN ETSU vs. DISTRICT METALS | SHIN ETSU vs. FIREWEED METALS P | SHIN ETSU vs. De Grey Mining |
| ADRIATIC METALS vs. 24SEVENOFFICE GROUP AB | ADRIATIC METALS vs. Corporate Office Properties | ADRIATIC METALS vs. G8 EDUCATION | ADRIATIC METALS vs. DEVRY EDUCATION GRP |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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