Correlation Between SHIMANO INC and Trip Group
Can any of the company-specific risk be diversified away by investing in both SHIMANO INC and Trip Group 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 SHIMANO INC and Trip Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SHIMANO INC UNSPADR10 and Trip Group Limited, you can compare the effects of market volatilities on SHIMANO INC and Trip Group 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 SHIMANO INC with a short position of Trip Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHIMANO INC and Trip Group.
Diversification Opportunities for SHIMANO INC and Trip Group
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SHIMANO and Trip is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding SHIMANO INC UNSPADR10 and Trip Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trip Group Limited and SHIMANO INC 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 SHIMANO INC UNSPADR10 are associated (or correlated) with Trip Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trip Group Limited has no effect on the direction of SHIMANO INC i.e., SHIMANO INC and Trip Group go up and down completely randomly.
Pair Corralation between SHIMANO INC and Trip Group
Assuming the 90 days trading horizon SHIMANO INC UNSPADR10 is expected to under-perform the Trip Group. In addition to that, SHIMANO INC is 1.24 times more volatile than Trip Group Limited. It trades about -0.01 of its total potential returns per unit of risk. Trip Group Limited is currently generating about 0.07 per unit of volatility. If you would invest 5,840 in Trip Group Limited on August 31, 2024 and sell it today you would earn a total of 180.00 from holding Trip Group Limited or generate 3.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SHIMANO INC UNSPADR10 vs. Trip Group Limited
Performance |
| Timeline |
| SHIMANO INC UNSPADR10 |
| Trip Group Limited |
SHIMANO INC and Trip Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SHIMANO INC and Trip Group
The main advantage of trading using opposite SHIMANO INC and Trip Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHIMANO INC position performs unexpectedly, Trip Group 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 Trip Group will offset losses from the drop in Trip Group's long position.| SHIMANO INC vs. Li Ning Company | SHIMANO INC vs. Trip Group Limited | SHIMANO INC vs. Superior Plus Corp | SHIMANO INC vs. NMI Holdings |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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