Correlation Between Sekisui Chemical and HORNBACH Baumarkt
Can any of the company-specific risk be diversified away by investing in both Sekisui Chemical and HORNBACH Baumarkt 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 HORNBACH Baumarkt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sekisui Chemical Co and HORNBACH Baumarkt AG, you can compare the effects of market volatilities on Sekisui Chemical and HORNBACH Baumarkt 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 HORNBACH Baumarkt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sekisui Chemical and HORNBACH Baumarkt.
Diversification Opportunities for Sekisui Chemical and HORNBACH Baumarkt
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sekisui and HORNBACH is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Sekisui Chemical Co and HORNBACH Baumarkt AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HORNBACH Baumarkt 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 Co are associated (or correlated) with HORNBACH Baumarkt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HORNBACH Baumarkt has no effect on the direction of Sekisui Chemical i.e., Sekisui Chemical and HORNBACH Baumarkt go up and down completely randomly.
Pair Corralation between Sekisui Chemical and HORNBACH Baumarkt
Assuming the 90 days horizon Sekisui Chemical Co is expected to generate 1.25 times more return on investment than HORNBACH Baumarkt. However, Sekisui Chemical is 1.25 times more volatile than HORNBACH Baumarkt AG. It trades about 0.07 of its potential returns per unit of risk. HORNBACH Baumarkt AG is currently generating about 0.03 per unit of risk. If you would invest 1,440 in Sekisui Chemical Co on September 13, 2024 and sell it today you would earn a total of 40.00 from holding Sekisui Chemical Co or generate 2.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sekisui Chemical Co vs. HORNBACH Baumarkt AG
Performance |
| Timeline |
| Sekisui Chemical |
| HORNBACH Baumarkt |
Sekisui Chemical and HORNBACH Baumarkt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sekisui Chemical and HORNBACH Baumarkt
The main advantage of trading using opposite Sekisui Chemical and HORNBACH Baumarkt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sekisui Chemical position performs unexpectedly, HORNBACH Baumarkt 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 HORNBACH Baumarkt will offset losses from the drop in HORNBACH Baumarkt's long position.| Sekisui Chemical vs. Lennar | Sekisui Chemical vs. Superior Plus Corp | Sekisui Chemical vs. SIVERS SEMICONDUCTORS AB | Sekisui Chemical vs. NorAm Drilling AS |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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