Correlation Between SHIN-ETSU CHEMICAL and Select Medical
Can any of the company-specific risk be diversified away by investing in both SHIN-ETSU CHEMICAL and Select Medical 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 CHEMICAL and Select Medical 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 Select Medical Holdings, you can compare the effects of market volatilities on SHIN-ETSU CHEMICAL and Select Medical 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 CHEMICAL with a short position of Select Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHIN-ETSU CHEMICAL and Select Medical.
Diversification Opportunities for SHIN-ETSU CHEMICAL and Select Medical
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SHIN-ETSU and Select is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding SHIN ETSU CHEMICAL and Select Medical Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Select Medical Holdings and SHIN-ETSU CHEMICAL 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 Select Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Select Medical Holdings has no effect on the direction of SHIN-ETSU CHEMICAL i.e., SHIN-ETSU CHEMICAL and Select Medical go up and down completely randomly.
Pair Corralation between SHIN-ETSU CHEMICAL and Select Medical
Assuming the 90 days trading horizon SHIN ETSU CHEMICAL is expected to generate 0.51 times more return on investment than Select Medical. However, SHIN ETSU CHEMICAL is 1.97 times less risky than Select Medical. It trades about -0.01 of its potential returns per unit of risk. Select Medical Holdings is currently generating about -0.05 per unit of risk. If you would invest 3,221 in SHIN ETSU CHEMICAL on November 3, 2024 and sell it today you would lose (200.00) from holding SHIN ETSU CHEMICAL or give up 6.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SHIN ETSU CHEMICAL vs. Select Medical Holdings
Performance |
| Timeline |
| SHIN ETSU CHEMICAL |
| Select Medical Holdings |
SHIN-ETSU CHEMICAL and Select Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SHIN-ETSU CHEMICAL and Select Medical
The main advantage of trading using opposite SHIN-ETSU CHEMICAL and Select Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHIN-ETSU CHEMICAL position performs unexpectedly, Select Medical 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 Select Medical will offset losses from the drop in Select Medical's long position.| SHIN-ETSU CHEMICAL vs. SIVERS SEMICONDUCTORS AB | SHIN-ETSU CHEMICAL vs. NorAm Drilling AS | SHIN-ETSU CHEMICAL vs. Volkswagen AG | SHIN-ETSU CHEMICAL vs. Darden Restaurants |
| Select Medical vs. PLAYMATES TOYS | Select Medical vs. SILVER BULLET DATA | Select Medical vs. Linedata Services SA | Select Medical vs. Automatic Data Processing |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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