Correlation Between Soken Chemical and EDISON INTL

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Can any of the company-specific risk be diversified away by investing in both Soken Chemical and EDISON INTL 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 Soken Chemical and EDISON INTL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Soken Chemical Engineering and EDISON INTL, you can compare the effects of market volatilities on Soken Chemical and EDISON INTL 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 Soken Chemical with a short position of EDISON INTL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Soken Chemical and EDISON INTL.

Diversification Opportunities for Soken Chemical and EDISON INTL

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Soken and EDISON is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Soken Chemical Engineering and EDISON INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EDISON INTL and Soken 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 Soken Chemical Engineering are associated (or correlated) with EDISON INTL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EDISON INTL has no effect on the direction of Soken Chemical i.e., Soken Chemical and EDISON INTL go up and down completely randomly.

Pair Corralation between Soken Chemical and EDISON INTL

If you would invest  1,266  in Soken Chemical Engineering on December 1, 2024 and sell it today you would earn a total of  0.00  from holding Soken Chemical Engineering or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy95.65%
ValuesDaily Returns

Soken Chemical Engineering  vs.  EDISON INTL

 Performance 
       Timeline  
Soken Chemical Engin 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Soken Chemical Engineering has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Soken Chemical is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.
EDISON INTL 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days EDISON INTL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Soken Chemical and EDISON INTL Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Soken Chemical and EDISON INTL

The main advantage of trading using opposite Soken Chemical and EDISON INTL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Soken Chemical position performs unexpectedly, EDISON INTL 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 EDISON INTL will offset losses from the drop in EDISON INTL's long position.
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The idea behind Soken Chemical Engineering and EDISON INTL pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

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