Correlation Between Shin Etsu and Asahi Kasei
Can any of the company-specific risk be diversified away by investing in both Shin Etsu 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 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 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 with a short position of Asahi Kasei. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Etsu and Asahi Kasei.
Diversification Opportunities for Shin Etsu and Asahi Kasei
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shin and Asahi is -0.85. 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 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 i.e., Shin Etsu and Asahi Kasei go up and down completely randomly.
Pair Corralation between Shin Etsu and Asahi Kasei
If you would invest 1,821 in Shin Etsu Chemical Co on August 28, 2024 and sell it today you would earn a total of 10.00 from holding Shin Etsu Chemical Co or generate 0.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 4.55% |
| 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 |
Good
Shin Etsu and Asahi Kasei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Etsu and Asahi Kasei
The main advantage of trading using opposite Shin Etsu and Asahi Kasei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Etsu 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 vs. Origin Materials | Shin Etsu vs. BASF SE NA | Shin Etsu vs. Braskem SA Class | Shin Etsu vs. Lsb Industries |
| 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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