Correlation Between Swire Pacific and Toshiba
Can any of the company-specific risk be diversified away by investing in both Swire Pacific and Toshiba 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 Swire Pacific and Toshiba into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swire Pacific and Toshiba, you can compare the effects of market volatilities on Swire Pacific and Toshiba 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 Swire Pacific with a short position of Toshiba. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swire Pacific and Toshiba.
Diversification Opportunities for Swire Pacific and Toshiba
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Swire and Toshiba is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Swire Pacific and Toshiba in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toshiba and Swire Pacific 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 Swire Pacific are associated (or correlated) with Toshiba. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toshiba has no effect on the direction of Swire Pacific i.e., Swire Pacific and Toshiba go up and down completely randomly.
Pair Corralation between Swire Pacific and Toshiba
Assuming the 90 days horizon Swire Pacific is expected to generate 1.64 times more return on investment than Toshiba. However, Swire Pacific is 1.64 times more volatile than Toshiba. It trades about 0.06 of its potential returns per unit of risk. Toshiba is currently generating about 0.03 per unit of risk. If you would invest 566.00 in Swire Pacific on August 27, 2024 and sell it today you would earn a total of 254.00 from holding Swire Pacific or generate 44.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 9.12% |
| Values | Daily Returns |
Swire Pacific vs. Toshiba
Performance |
| Timeline |
| Swire Pacific |
| Toshiba |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Swire Pacific and Toshiba Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swire Pacific and Toshiba
The main advantage of trading using opposite Swire Pacific and Toshiba positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swire Pacific position performs unexpectedly, Toshiba 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 Toshiba will offset losses from the drop in Toshiba's long position.| Swire Pacific vs. CK Hutchison Holdings | Swire Pacific vs. Marubeni | Swire Pacific vs. Sumitomo Corp ADR | Swire Pacific vs. Marubeni Corp ADR |
| Toshiba vs. Griffon | Toshiba vs. Maanshan Iron Steel | Toshiba vs. Topbuild Corp | Toshiba vs. Summit Environmental |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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