Correlation Between Toshiba and Swire Pacific
Can any of the company-specific risk be diversified away by investing in both Toshiba and Swire Pacific 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 Swire Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Toshiba and Swire Pacific, you can compare the effects of market volatilities on Toshiba and Swire Pacific 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 Swire Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Toshiba and Swire Pacific.
Diversification Opportunities for Toshiba and Swire Pacific
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Toshiba and Swire is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Toshiba and Swire Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swire Pacific 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 Swire Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swire Pacific has no effect on the direction of Toshiba i.e., Toshiba and Swire Pacific go up and down completely randomly.
Pair Corralation between Toshiba and Swire Pacific
If you would invest 831.00 in Swire Pacific on August 31, 2024 and sell it today you would lose (2.00) from holding Swire Pacific or give up 0.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Toshiba vs. Swire Pacific
Performance |
| Timeline |
| Toshiba |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Swire Pacific |
Toshiba and Swire Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Toshiba and Swire Pacific
The main advantage of trading using opposite Toshiba and Swire Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Toshiba position performs unexpectedly, Swire Pacific 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 Swire Pacific will offset losses from the drop in Swire Pacific's long position.| Toshiba vs. Hudson Technologies | Toshiba vs. Eastman Chemical | Toshiba vs. Hawkins | Toshiba vs. FormFactor |
| Swire Pacific vs. Sumitomo Corp ADR | Swire Pacific vs. Itochu Corp ADR | Swire Pacific vs. Mitsubishi Corp | Swire Pacific vs. ITOCHU |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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