Correlation Between SHIN ETSU and AIR PRODCHEMICALS
Can any of the company-specific risk be diversified away by investing in both SHIN ETSU and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS 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 AIR PRODCHEMICALS, you can compare the effects of market volatilities on SHIN ETSU and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHIN ETSU and AIR PRODCHEMICALS.
Diversification Opportunities for SHIN ETSU and AIR PRODCHEMICALS
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SHIN and AIR is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding SHIN ETSU CHEMICAL and AIR PRODCHEMICALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIR PRODCHEMICALS 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 AIR PRODCHEMICALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIR PRODCHEMICALS has no effect on the direction of SHIN ETSU i.e., SHIN ETSU and AIR PRODCHEMICALS go up and down completely randomly.
Pair Corralation between SHIN ETSU and AIR PRODCHEMICALS
Assuming the 90 days trading horizon SHIN ETSU CHEMICAL is expected to generate 1.13 times more return on investment than AIR PRODCHEMICALS. However, SHIN ETSU is 1.13 times more volatile than AIR PRODCHEMICALS. It trades about 0.05 of its potential returns per unit of risk. AIR PRODCHEMICALS is currently generating about 0.02 per unit of risk. If you would invest 2,391 in SHIN ETSU CHEMICAL on September 3, 2024 and sell it today you would earn a total of 1,108 from holding SHIN ETSU CHEMICAL or generate 46.34% 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. AIR PRODCHEMICALS
Performance |
| Timeline |
| SHIN ETSU CHEMICAL |
| AIR PRODCHEMICALS |
SHIN ETSU and AIR PRODCHEMICALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SHIN ETSU and AIR PRODCHEMICALS
The main advantage of trading using opposite SHIN ETSU and AIR PRODCHEMICALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHIN ETSU position performs unexpectedly, AIR PRODCHEMICALS 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 AIR PRODCHEMICALS will offset losses from the drop in AIR PRODCHEMICALS'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 |
| AIR PRODCHEMICALS vs. Tsingtao Brewery | AIR PRODCHEMICALS vs. Broadwind | AIR PRODCHEMICALS vs. National Beverage Corp | AIR PRODCHEMICALS vs. United Breweries Co |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |