Correlation Between SEKISUI CHEMICAL and BANNER
Can any of the company-specific risk be diversified away by investing in both SEKISUI CHEMICAL and BANNER 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 BANNER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEKISUI CHEMICAL and BANNER, you can compare the effects of market volatilities on SEKISUI CHEMICAL and BANNER 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 BANNER. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEKISUI CHEMICAL and BANNER.
Diversification Opportunities for SEKISUI CHEMICAL and BANNER
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SEKISUI and BANNER is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding SEKISUI CHEMICAL and BANNER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANNER 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 BANNER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANNER has no effect on the direction of SEKISUI CHEMICAL i.e., SEKISUI CHEMICAL and BANNER go up and down completely randomly.
Pair Corralation between SEKISUI CHEMICAL and BANNER
Assuming the 90 days trading horizon SEKISUI CHEMICAL is expected to generate 1.85 times more return on investment than BANNER. However, SEKISUI CHEMICAL is 1.85 times more volatile than BANNER. It trades about 0.16 of its potential returns per unit of risk. BANNER is currently generating about -0.27 per unit of risk. If you would invest 1,480 in SEKISUI CHEMICAL on October 11, 2024 and sell it today you would earn a total of 120.00 from holding SEKISUI CHEMICAL or generate 8.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEKISUI CHEMICAL vs. BANNER
Performance |
| Timeline |
| SEKISUI CHEMICAL |
| BANNER |
SEKISUI CHEMICAL and BANNER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEKISUI CHEMICAL and BANNER
The main advantage of trading using opposite SEKISUI CHEMICAL and BANNER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEKISUI CHEMICAL position performs unexpectedly, BANNER 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 BANNER will offset losses from the drop in BANNER's long position.| SEKISUI CHEMICAL vs. Transport International Holdings | SEKISUI CHEMICAL vs. USWE SPORTS AB | SEKISUI CHEMICAL vs. TITANIUM TRANSPORTGROUP | SEKISUI CHEMICAL vs. ARDAGH METAL PACDL 0001 |
| BANNER vs. Quaker Chemical | BANNER vs. SEKISUI CHEMICAL | BANNER vs. X FAB Silicon Foundries | BANNER vs. Silicon Motion Technology |
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 Stocks Directory module to find actively traded stocks across global markets.
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