Correlation Between SEKISUI CHEMICAL and NH HOTEL
Can any of the company-specific risk be diversified away by investing in both SEKISUI CHEMICAL and NH HOTEL 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 NH HOTEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEKISUI CHEMICAL and NH HOTEL GROUP, you can compare the effects of market volatilities on SEKISUI CHEMICAL and NH HOTEL 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 NH HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEKISUI CHEMICAL and NH HOTEL.
Diversification Opportunities for SEKISUI CHEMICAL and NH HOTEL
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SEKISUI and NH5 is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding SEKISUI CHEMICAL and NH HOTEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH HOTEL GROUP 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 NH HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH HOTEL GROUP has no effect on the direction of SEKISUI CHEMICAL i.e., SEKISUI CHEMICAL and NH HOTEL go up and down completely randomly.
Pair Corralation between SEKISUI CHEMICAL and NH HOTEL
Assuming the 90 days trading horizon SEKISUI CHEMICAL is expected to generate 2.23 times less return on investment than NH HOTEL. But when comparing it to its historical volatility, SEKISUI CHEMICAL is 2.2 times less risky than NH HOTEL. It trades about 0.03 of its potential returns per unit of risk. NH HOTEL GROUP is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 310.00 in NH HOTEL GROUP on September 3, 2024 and sell it today you would earn a total of 101.00 from holding NH HOTEL GROUP or generate 32.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEKISUI CHEMICAL vs. NH HOTEL GROUP
Performance |
| Timeline |
| SEKISUI CHEMICAL |
| NH HOTEL GROUP |
SEKISUI CHEMICAL and NH HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEKISUI CHEMICAL and NH HOTEL
The main advantage of trading using opposite SEKISUI CHEMICAL and NH HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEKISUI CHEMICAL position performs unexpectedly, NH HOTEL 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 NH HOTEL will offset losses from the drop in NH HOTEL's long position.| SEKISUI CHEMICAL vs. TOTAL GABON | SEKISUI CHEMICAL vs. Walgreens Boots Alliance | SEKISUI CHEMICAL vs. Peak Resources Limited |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |