Correlation Between Shin Etsu and CARGOJET INC
Can any of the company-specific risk be diversified away by investing in both Shin Etsu and CARGOJET INC 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 CARGOJET INC 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 CARGOJET INC VAR, you can compare the effects of market volatilities on Shin Etsu and CARGOJET INC 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 CARGOJET INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Etsu and CARGOJET INC.
Diversification Opportunities for Shin Etsu and CARGOJET INC
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shin and CARGOJET is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Shin Etsu Chemical Co and CARGOJET INC VAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARGOJET INC VAR 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 CARGOJET INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CARGOJET INC VAR has no effect on the direction of Shin Etsu i.e., Shin Etsu and CARGOJET INC go up and down completely randomly.
Pair Corralation between Shin Etsu and CARGOJET INC
Assuming the 90 days horizon Shin Etsu Chemical Co is expected to generate 1.36 times more return on investment than CARGOJET INC. However, Shin Etsu is 1.36 times more volatile than CARGOJET INC VAR. It trades about -0.02 of its potential returns per unit of risk. CARGOJET INC VAR is currently generating about -0.72 per unit of risk. If you would invest 3,469 in Shin Etsu Chemical Co on September 12, 2024 and sell it today you would lose (37.00) from holding Shin Etsu Chemical Co or give up 1.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shin Etsu Chemical Co vs. CARGOJET INC VAR
Performance |
| Timeline |
| Shin Etsu Chemical |
| CARGOJET INC VAR |
Shin Etsu and CARGOJET INC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Etsu and CARGOJET INC
The main advantage of trading using opposite Shin Etsu and CARGOJET INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Etsu position performs unexpectedly, CARGOJET INC 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 CARGOJET INC will offset losses from the drop in CARGOJET INC'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 |
| CARGOJET INC vs. DXC Technology Co | CARGOJET INC vs. GAMESTOP | CARGOJET INC vs. PLAYMATES TOYS | CARGOJET INC vs. International Game Technology |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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