Correlation Between Sumitomo Chemical and Khaitan Chemicals
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By analyzing existing cross correlation between Sumitomo Chemical India and Khaitan Chemicals Fertilizers, you can compare the effects of market volatilities on Sumitomo Chemical and Khaitan Chemicals 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 Sumitomo Chemical with a short position of Khaitan Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Chemical and Khaitan Chemicals.
Diversification Opportunities for Sumitomo Chemical and Khaitan Chemicals
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sumitomo and Khaitan is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Chemical India and Khaitan Chemicals Fertilizers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Khaitan Chemicals and Sumitomo 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 Sumitomo Chemical India are associated (or correlated) with Khaitan Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Khaitan Chemicals has no effect on the direction of Sumitomo Chemical i.e., Sumitomo Chemical and Khaitan Chemicals go up and down completely randomly.
Pair Corralation between Sumitomo Chemical and Khaitan Chemicals
Assuming the 90 days trading horizon Sumitomo Chemical India is expected to generate 0.81 times more return on investment than Khaitan Chemicals. However, Sumitomo Chemical India is 1.24 times less risky than Khaitan Chemicals. It trades about -0.02 of its potential returns per unit of risk. Khaitan Chemicals Fertilizers is currently generating about -0.02 per unit of risk. If you would invest 53,375 in Sumitomo Chemical India on October 26, 2024 and sell it today you would lose (5,180) from holding Sumitomo Chemical India or give up 9.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sumitomo Chemical India vs. Khaitan Chemicals Fertilizers
Performance |
| Timeline |
| Sumitomo Chemical India |
| Khaitan Chemicals |
Sumitomo Chemical and Khaitan Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Chemical and Khaitan Chemicals
The main advantage of trading using opposite Sumitomo Chemical and Khaitan Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Chemical position performs unexpectedly, Khaitan Chemicals 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 Khaitan Chemicals will offset losses from the drop in Khaitan Chemicals' long position.| Sumitomo Chemical vs. Alkali Metals Limited | Sumitomo Chemical vs. Hisar Metal Industries | Sumitomo Chemical vs. Sarthak Metals Limited | Sumitomo Chemical vs. Bikaji Foods International |
| Khaitan Chemicals vs. Fertilizers and Chemicals | Khaitan Chemicals vs. UPL Limited | Khaitan Chemicals vs. Sumitomo Chemical India | Khaitan Chemicals vs. Bayer Cropscience 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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