Correlation Between Shin Etsu and BANK HANDLOWY
Can any of the company-specific risk be diversified away by investing in both Shin Etsu and BANK HANDLOWY 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 BANK HANDLOWY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shin Etsu Chemical Co and BANK HANDLOWY, you can compare the effects of market volatilities on Shin Etsu and BANK HANDLOWY 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 BANK HANDLOWY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Etsu and BANK HANDLOWY.
Diversification Opportunities for Shin Etsu and BANK HANDLOWY
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Shin and BANK is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Shin Etsu Chemical Co and BANK HANDLOWY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK HANDLOWY 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 Co are associated (or correlated) with BANK HANDLOWY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK HANDLOWY has no effect on the direction of Shin Etsu i.e., Shin Etsu and BANK HANDLOWY go up and down completely randomly.
Pair Corralation between Shin Etsu and BANK HANDLOWY
Assuming the 90 days horizon Shin Etsu Chemical Co is expected to under-perform the BANK HANDLOWY. In addition to that, Shin Etsu is 2.0 times more volatile than BANK HANDLOWY. It trades about -0.19 of its total potential returns per unit of risk. BANK HANDLOWY is currently generating about 0.08 per unit of volatility. If you would invest 2,075 in BANK HANDLOWY on September 20, 2024 and sell it today you would earn a total of 30.00 from holding BANK HANDLOWY or generate 1.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shin Etsu Chemical Co vs. BANK HANDLOWY
Performance |
| Timeline |
| Shin Etsu Chemical |
| BANK HANDLOWY |
Shin Etsu and BANK HANDLOWY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Etsu and BANK HANDLOWY
The main advantage of trading using opposite Shin Etsu and BANK HANDLOWY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Etsu position performs unexpectedly, BANK HANDLOWY 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 BANK HANDLOWY will offset losses from the drop in BANK HANDLOWY's long position.| Shin Etsu vs. AIR LIQUIDE ADR | Shin Etsu vs. Ganfeng Lithium Co | Shin Etsu vs. Superior Plus Corp | Shin Etsu vs. SIVERS SEMICONDUCTORS AB |
| BANK HANDLOWY vs. PTT Global Chemical | BANK HANDLOWY vs. Magnachip Semiconductor | BANK HANDLOWY vs. Shin Etsu Chemical Co | BANK HANDLOWY vs. INDO RAMA SYNTHETIC |
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.
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