Correlation Between SHIN ETSU and GREENX METALS
Can any of the company-specific risk be diversified away by investing in both SHIN ETSU and GREENX 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 GREENX 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 GREENX METALS LTD, you can compare the effects of market volatilities on SHIN ETSU and GREENX 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 GREENX METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHIN ETSU and GREENX METALS.
Diversification Opportunities for SHIN ETSU and GREENX METALS
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between SHIN and GREENX is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding SHIN ETSU CHEMICAL and GREENX METALS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GREENX METALS LTD 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 GREENX METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GREENX METALS LTD has no effect on the direction of SHIN ETSU i.e., SHIN ETSU and GREENX METALS go up and down completely randomly.
Pair Corralation between SHIN ETSU and GREENX METALS
Assuming the 90 days trading horizon SHIN ETSU is expected to generate 1.53 times less return on investment than GREENX METALS. But when comparing it to its historical volatility, SHIN ETSU CHEMICAL is 2.71 times less risky than GREENX METALS. It trades about 0.05 of its potential returns per unit of risk. GREENX METALS LTD is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 35.00 in GREENX METALS LTD on September 3, 2024 and sell it today you would earn a total of 4.00 from holding GREENX METALS LTD or generate 11.43% 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. GREENX METALS LTD
Performance |
| Timeline |
| SHIN ETSU CHEMICAL |
| GREENX METALS LTD |
SHIN ETSU and GREENX METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SHIN ETSU and GREENX METALS
The main advantage of trading using opposite SHIN ETSU and GREENX METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHIN ETSU position performs unexpectedly, GREENX 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 GREENX METALS will offset losses from the drop in GREENX METALS'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 |
| GREENX METALS vs. CORONGLRES CDIS101 | GREENX METALS vs. AJ LUCAS GROUP | GREENX METALS vs. Superior Plus Corp | GREENX METALS vs. NMI Holdings |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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