Correlation Between Shimano and Shimano
Can any of the company-specific risk be diversified away by investing in both Shimano and Shimano 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 and Shimano into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shimano and Shimano Inc ADR, you can compare the effects of market volatilities on Shimano and Shimano 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 with a short position of Shimano. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shimano and Shimano.
Diversification Opportunities for Shimano and Shimano
Almost no diversification
The 3 months correlation between Shimano and Shimano is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Shimano and Shimano Inc ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shimano Inc ADR and Shimano 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 are associated (or correlated) with Shimano. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shimano Inc ADR has no effect on the direction of Shimano i.e., Shimano and Shimano go up and down completely randomly.
Pair Corralation between Shimano and Shimano
Assuming the 90 days horizon Shimano is expected to generate 1.56 times more return on investment than Shimano. However, Shimano is 1.56 times more volatile than Shimano Inc ADR. It trades about 0.01 of its potential returns per unit of risk. Shimano Inc ADR is currently generating about 0.01 per unit of risk. If you would invest 13,543 in Shimano on August 27, 2024 and sell it today you would lose (303.00) from holding Shimano or give up 2.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.47% |
| Values | Daily Returns |
Shimano vs. Shimano Inc ADR
Performance |
| Timeline |
| Shimano |
| Shimano Inc ADR |
Shimano and Shimano Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shimano and Shimano
The main advantage of trading using opposite Shimano and Shimano positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shimano position performs unexpectedly, Shimano 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 Shimano will offset losses from the drop in Shimano's long position.| Shimano vs. HUMANA INC | Shimano vs. Aquagold International | Shimano vs. Barloworld Ltd ADR | Shimano vs. Morningstar Unconstrained Allocation |
| Shimano vs. Callaway Golf | Shimano vs. Peloton Interactive | Shimano vs. BANDAI NAMCO Holdings | Shimano vs. Nikon Corp |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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