Correlation Between Toshiba and Honeywell International
Can any of the company-specific risk be diversified away by investing in both Toshiba and Honeywell International 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 Toshiba and Honeywell International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Toshiba and Honeywell International, you can compare the effects of market volatilities on Toshiba and Honeywell International 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 Toshiba with a short position of Honeywell International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Toshiba and Honeywell International.
Diversification Opportunities for Toshiba and Honeywell International
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Toshiba and Honeywell is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Toshiba and Honeywell International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Honeywell International and Toshiba 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 Toshiba are associated (or correlated) with Honeywell International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Honeywell International has no effect on the direction of Toshiba i.e., Toshiba and Honeywell International go up and down completely randomly.
Pair Corralation between Toshiba and Honeywell International
If you would invest 20,509 in Honeywell International on August 29, 2024 and sell it today you would earn a total of 2,531 from holding Honeywell International or generate 12.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Toshiba vs. Honeywell International
Performance |
| Timeline |
| Toshiba |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Honeywell International |
Toshiba and Honeywell International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Toshiba and Honeywell International
The main advantage of trading using opposite Toshiba and Honeywell International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Toshiba position performs unexpectedly, Honeywell International 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 Honeywell International will offset losses from the drop in Honeywell International's long position.| Toshiba vs. PVH Corp | Toshiba vs. Ross Stores | Toshiba vs. Vince Holding Corp | Toshiba vs. Victorias Secret Co |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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