Correlation Between Shin-Etsu Chemical and Asahi Kasei
Can any of the company-specific risk be diversified away by investing in both Shin-Etsu Chemical and Asahi Kasei 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 Asahi Kasei 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 Asahi Kasei, you can compare the effects of market volatilities on Shin-Etsu Chemical and Asahi Kasei 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 Asahi Kasei. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin-Etsu Chemical and Asahi Kasei.
Diversification Opportunities for Shin-Etsu Chemical and Asahi Kasei
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shin-Etsu and Asahi is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Shin Etsu Chemical Co and Asahi Kasei in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asahi Kasei 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 Co are associated (or correlated) with Asahi Kasei. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asahi Kasei has no effect on the direction of Shin-Etsu Chemical i.e., Shin-Etsu Chemical and Asahi Kasei go up and down completely randomly.
Pair Corralation between Shin-Etsu Chemical and Asahi Kasei
Assuming the 90 days horizon Shin-Etsu Chemical is expected to generate 3.37 times less return on investment than Asahi Kasei. In addition to that, Shin-Etsu Chemical is 1.91 times more volatile than Asahi Kasei. It trades about 0.01 of its total potential returns per unit of risk. Asahi Kasei is currently generating about 0.04 per unit of volatility. If you would invest 715.00 in Asahi Kasei on September 3, 2024 and sell it today you would earn a total of 45.00 from holding Asahi Kasei or generate 6.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 74.66% |
| Values | Daily Returns |
Shin Etsu Chemical Co vs. Asahi Kasei
Performance |
| Timeline |
| Shin Etsu Chemical |
| Asahi Kasei |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Shin-Etsu Chemical and Asahi Kasei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin-Etsu Chemical and Asahi Kasei
The main advantage of trading using opposite Shin-Etsu Chemical and Asahi Kasei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin-Etsu Chemical position performs unexpectedly, Asahi Kasei 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 Asahi Kasei will offset losses from the drop in Asahi Kasei's long position.| Shin-Etsu Chemical vs. Kuraray Co | Shin-Etsu Chemical vs. Mitsubishi Chemical Holdings | Shin-Etsu Chemical vs. Sumitomo Chemical Co | Shin-Etsu Chemical vs. Valhi Inc |
| Asahi Kasei vs. Altech Batteries Limited | Asahi Kasei vs. Alumifuel Pwr Corp | Asahi Kasei vs. Shin Etsu Chemical Co | Asahi Kasei vs. ASP Isotopes Common |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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