Correlation Between SEKISUI CHEMICAL and Amazon
Can any of the company-specific risk be diversified away by investing in both SEKISUI CHEMICAL and Amazon 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 Amazon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEKISUI CHEMICAL and Amazon Inc, you can compare the effects of market volatilities on SEKISUI CHEMICAL and Amazon 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 Amazon. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEKISUI CHEMICAL and Amazon.
Diversification Opportunities for SEKISUI CHEMICAL and Amazon
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SEKISUI and Amazon is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding SEKISUI CHEMICAL and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc 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 Amazon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon Inc has no effect on the direction of SEKISUI CHEMICAL i.e., SEKISUI CHEMICAL and Amazon go up and down completely randomly.
Pair Corralation between SEKISUI CHEMICAL and Amazon
Assuming the 90 days trading horizon SEKISUI CHEMICAL is expected to generate 2.89 times less return on investment than Amazon. But when comparing it to its historical volatility, SEKISUI CHEMICAL is 1.16 times less risky than Amazon. It trades about 0.05 of its potential returns per unit of risk. Amazon Inc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 13,800 in Amazon Inc on September 20, 2024 and sell it today you would earn a total of 7,710 from holding Amazon Inc or generate 55.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEKISUI CHEMICAL vs. Amazon Inc
Performance |
| Timeline |
| SEKISUI CHEMICAL |
| Amazon Inc |
SEKISUI CHEMICAL and Amazon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEKISUI CHEMICAL and Amazon
The main advantage of trading using opposite SEKISUI CHEMICAL and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEKISUI CHEMICAL position performs unexpectedly, Amazon 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 Amazon will offset losses from the drop in Amazon's long position.| SEKISUI CHEMICAL vs. INDOFOOD AGRI RES | SEKISUI CHEMICAL vs. Taiwan Semiconductor Manufacturing | SEKISUI CHEMICAL vs. PT Indofood Sukses | SEKISUI CHEMICAL vs. MagnaChip Semiconductor Corp |
| Amazon vs. PACIFIC ONLINE | Amazon vs. CARSALESCOM | Amazon vs. X FAB Silicon Foundries | Amazon vs. SEKISUI CHEMICAL |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |