Correlation Between SHIMANO INC and Flight Centre
Can any of the company-specific risk be diversified away by investing in both SHIMANO INC and Flight Centre 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 Flight Centre 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 Flight Centre Travel, you can compare the effects of market volatilities on SHIMANO INC and Flight Centre 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 Flight Centre. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHIMANO INC and Flight Centre.
Diversification Opportunities for SHIMANO INC and Flight Centre
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SHIMANO and Flight is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding SHIMANO INC UNSPADR10 and Flight Centre Travel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flight Centre Travel 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 Flight Centre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flight Centre Travel has no effect on the direction of SHIMANO INC i.e., SHIMANO INC and Flight Centre go up and down completely randomly.
Pair Corralation between SHIMANO INC and Flight Centre
Assuming the 90 days trading horizon SHIMANO INC UNSPADR10 is expected to under-perform the Flight Centre. In addition to that, SHIMANO INC is 1.34 times more volatile than Flight Centre Travel. It trades about -0.04 of its total potential returns per unit of risk. Flight Centre Travel is currently generating about 0.16 per unit of volatility. If you would invest 1,000.00 in Flight Centre Travel on November 28, 2024 and sell it today you would earn a total of 60.00 from holding Flight Centre Travel or generate 6.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
SHIMANO INC UNSPADR10 vs. Flight Centre Travel
Performance |
| Timeline |
| SHIMANO INC UNSPADR10 |
| Flight Centre Travel |
SHIMANO INC and Flight Centre Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SHIMANO INC and Flight Centre
The main advantage of trading using opposite SHIMANO INC and Flight Centre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHIMANO INC position performs unexpectedly, Flight Centre 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 Flight Centre will offset losses from the drop in Flight Centre's long position.| SHIMANO INC vs. PSI Software AG | SHIMANO INC vs. PLANT VEDA FOODS | SHIMANO INC vs. EBRO FOODS | SHIMANO INC vs. Sqs Software Quality |
| Flight Centre vs. MELIA HOTELS | Flight Centre vs. Meli Hotels International | Flight Centre vs. Sinopec Shanghai Petrochemical | Flight Centre vs. MHP Hotel AG |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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