Correlation Between SEKISUI CHEMICAL and WIMFARM SA

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both SEKISUI CHEMICAL and WIMFARM SA 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 CHEMICAL and WIMFARM SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEKISUI CHEMICAL and WIMFARM SA EO, you can compare the effects of market volatilities on SEKISUI CHEMICAL and WIMFARM SA 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 CHEMICAL with a short position of WIMFARM SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEKISUI CHEMICAL and WIMFARM SA.

Diversification Opportunities for SEKISUI CHEMICAL and WIMFARM SA

0.21
  Correlation Coefficient

Modest diversification

The 3 months correlation between SEKISUI and WIMFARM is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding SEKISUI CHEMICAL and WIMFARM SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIMFARM SA EO and SEKISUI 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 SEKISUI CHEMICAL are associated (or correlated) with WIMFARM SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIMFARM SA EO has no effect on the direction of SEKISUI CHEMICAL i.e., SEKISUI CHEMICAL and WIMFARM SA go up and down completely randomly.

Pair Corralation between SEKISUI CHEMICAL and WIMFARM SA

Assuming the 90 days trading horizon SEKISUI CHEMICAL is expected to generate 6.64 times less return on investment than WIMFARM SA. But when comparing it to its historical volatility, SEKISUI CHEMICAL is 1.98 times less risky than WIMFARM SA. It trades about 0.06 of its potential returns per unit of risk. WIMFARM SA EO is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  315.00  in WIMFARM SA EO on October 23, 2024 and sell it today you would earn a total of  65.00  from holding WIMFARM SA EO or generate 20.63% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy94.12%
ValuesDaily Returns

SEKISUI CHEMICAL  vs.  WIMFARM SA EO

 Performance 
       Timeline  
SEKISUI CHEMICAL 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in SEKISUI CHEMICAL are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain forward indicators, SEKISUI CHEMICAL exhibited solid returns over the last few months and may actually be approaching a breakup point.
WIMFARM SA EO 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in WIMFARM SA EO are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, WIMFARM SA reported solid returns over the last few months and may actually be approaching a breakup point.

SEKISUI CHEMICAL and WIMFARM SA Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SEKISUI CHEMICAL and WIMFARM SA

The main advantage of trading using opposite SEKISUI CHEMICAL and WIMFARM SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEKISUI CHEMICAL position performs unexpectedly, WIMFARM SA 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 WIMFARM SA will offset losses from the drop in WIMFARM SA's long position.
The idea behind SEKISUI CHEMICAL and WIMFARM SA EO 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.
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.

Other Complementary Tools

Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Risk-Return Analysis
View associations between returns expected from investment and the risk you assume