Correlation Between Sekisui House and CAIRN HOMES
Can any of the company-specific risk be diversified away by investing in both Sekisui House and CAIRN HOMES 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 Sekisui House and CAIRN HOMES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sekisui House and CAIRN HOMES EO, you can compare the effects of market volatilities on Sekisui House and CAIRN HOMES 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 Sekisui House with a short position of CAIRN HOMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sekisui House and CAIRN HOMES.
Diversification Opportunities for Sekisui House and CAIRN HOMES
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sekisui and CAIRN is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sekisui House and CAIRN HOMES EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAIRN HOMES EO and Sekisui House 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 Sekisui House are associated (or correlated) with CAIRN HOMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAIRN HOMES EO has no effect on the direction of Sekisui House i.e., Sekisui House and CAIRN HOMES go up and down completely randomly.
Pair Corralation between Sekisui House and CAIRN HOMES
Assuming the 90 days trading horizon Sekisui House is expected to generate 5.13 times less return on investment than CAIRN HOMES. But when comparing it to its historical volatility, Sekisui House is 2.01 times less risky than CAIRN HOMES. It trades about 0.01 of its potential returns per unit of risk. CAIRN HOMES EO is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 209.00 in CAIRN HOMES EO on October 24, 2024 and sell it today you would earn a total of 1.00 from holding CAIRN HOMES EO or generate 0.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sekisui House vs. CAIRN HOMES EO
Performance |
| Timeline |
| Sekisui House |
| CAIRN HOMES EO |
Sekisui House and CAIRN HOMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sekisui House and CAIRN HOMES
The main advantage of trading using opposite Sekisui House and CAIRN HOMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sekisui House position performs unexpectedly, CAIRN HOMES 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 CAIRN HOMES will offset losses from the drop in CAIRN HOMES's long position.| Sekisui House vs. BJs Restaurants | Sekisui House vs. Stag Industrial | Sekisui House vs. DISTRICT METALS | Sekisui House vs. Entravision Communications |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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