Correlation Between Shin Etsu and THRACE PLASTICS
Can any of the company-specific risk be diversified away by investing in both Shin Etsu and THRACE PLASTICS 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 THRACE PLASTICS 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 THRACE PLASTICS, you can compare the effects of market volatilities on Shin Etsu and THRACE PLASTICS 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 THRACE PLASTICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Etsu and THRACE PLASTICS.
Diversification Opportunities for Shin Etsu and THRACE PLASTICS
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shin and THRACE is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Shin Etsu Chemical Co and THRACE PLASTICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THRACE PLASTICS 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 THRACE PLASTICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THRACE PLASTICS has no effect on the direction of Shin Etsu i.e., Shin Etsu and THRACE PLASTICS go up and down completely randomly.
Pair Corralation between Shin Etsu and THRACE PLASTICS
Assuming the 90 days horizon Shin Etsu Chemical Co is expected to under-perform the THRACE PLASTICS. In addition to that, Shin Etsu is 1.17 times more volatile than THRACE PLASTICS. It trades about -0.04 of its total potential returns per unit of risk. THRACE PLASTICS is currently generating about 0.1 per unit of volatility. If you would invest 380.00 in THRACE PLASTICS on September 12, 2024 and sell it today you would earn a total of 12.00 from holding THRACE PLASTICS or generate 3.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Shin Etsu Chemical Co vs. THRACE PLASTICS
Performance |
| Timeline |
| Shin Etsu Chemical |
| THRACE PLASTICS |
Shin Etsu and THRACE PLASTICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Etsu and THRACE PLASTICS
The main advantage of trading using opposite Shin Etsu and THRACE PLASTICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Etsu position performs unexpectedly, THRACE PLASTICS 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 THRACE PLASTICS will offset losses from the drop in THRACE PLASTICS'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 |
| THRACE PLASTICS vs. Apple Inc | THRACE PLASTICS vs. Apple Inc | THRACE PLASTICS vs. Apple Inc | THRACE PLASTICS vs. Apple Inc |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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