Correlation Between Shin Etsu and CAL MAINE
Can any of the company-specific risk be diversified away by investing in both Shin Etsu and CAL MAINE 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 CAL MAINE 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 CAL MAINE FOODS, you can compare the effects of market volatilities on Shin Etsu and CAL MAINE 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 CAL MAINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Etsu and CAL MAINE.
Diversification Opportunities for Shin Etsu and CAL MAINE
Pay attention - limited upside
The 3 months correlation between Shin and CAL is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Shin Etsu Chemical Co and CAL MAINE FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAL MAINE FOODS 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 CAL MAINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAL MAINE FOODS has no effect on the direction of Shin Etsu i.e., Shin Etsu and CAL MAINE go up and down completely randomly.
Pair Corralation between Shin Etsu and CAL MAINE
Assuming the 90 days horizon Shin Etsu Chemical Co is expected to under-perform the CAL MAINE. In addition to that, Shin Etsu is 1.01 times more volatile than CAL MAINE FOODS. It trades about -0.14 of its total potential returns per unit of risk. CAL MAINE FOODS is currently generating about 0.29 per unit of volatility. If you would invest 8,926 in CAL MAINE FOODS on September 22, 2024 and sell it today you would earn a total of 1,050 from holding CAL MAINE FOODS or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shin Etsu Chemical Co vs. CAL MAINE FOODS
Performance |
| Timeline |
| Shin Etsu Chemical |
| CAL MAINE FOODS |
Shin Etsu and CAL MAINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Etsu and CAL MAINE
The main advantage of trading using opposite Shin Etsu and CAL MAINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Etsu position performs unexpectedly, CAL MAINE 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 CAL MAINE will offset losses from the drop in CAL MAINE's long position.| Shin Etsu vs. Air Liquide SA | Shin Etsu vs. AIR LIQUIDE ADR | Shin Etsu vs. Air Products and | Shin Etsu vs. BASF SE |
| CAL MAINE vs. CHINA EDUCATION GROUP | CAL MAINE vs. Shin Etsu Chemical Co | CAL MAINE vs. Grand Canyon Education | CAL MAINE vs. G III Apparel Group |
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 Stocks Directory module to find actively traded stocks across global markets.
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