Correlation Between Sanyo Chemical and GPT
Can any of the company-specific risk be diversified away by investing in both Sanyo Chemical and GPT 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 Sanyo Chemical and GPT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sanyo Chemical Industries and GPT Group, you can compare the effects of market volatilities on Sanyo Chemical and GPT 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 Sanyo Chemical with a short position of GPT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanyo Chemical and GPT.
Diversification Opportunities for Sanyo Chemical and GPT
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sanyo and GPT is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Sanyo Chemical Industries and GPT Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GPT Group and Sanyo 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 Sanyo Chemical Industries are associated (or correlated) with GPT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GPT Group has no effect on the direction of Sanyo Chemical i.e., Sanyo Chemical and GPT go up and down completely randomly.
Pair Corralation between Sanyo Chemical and GPT
Assuming the 90 days horizon Sanyo Chemical Industries is expected to generate 0.48 times more return on investment than GPT. However, Sanyo Chemical Industries is 2.1 times less risky than GPT. It trades about 0.1 of its potential returns per unit of risk. GPT Group is currently generating about -0.02 per unit of risk. If you would invest 2,460 in Sanyo Chemical Industries on September 14, 2024 and sell it today you would earn a total of 60.00 from holding Sanyo Chemical Industries or generate 2.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sanyo Chemical Industries vs. GPT Group
Performance |
| Timeline |
| Sanyo Chemical Industries |
| GPT Group |
Sanyo Chemical and GPT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanyo Chemical and GPT
The main advantage of trading using opposite Sanyo Chemical and GPT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanyo Chemical position performs unexpectedly, GPT 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 GPT will offset losses from the drop in GPT's long position.| Sanyo Chemical vs. Hyrican Informationssysteme Aktiengesellschaft | Sanyo Chemical vs. PUBLIC STORAGE PRFO | Sanyo Chemical vs. LGI Homes | Sanyo Chemical vs. Tri Pointe Homes |
| GPT vs. MCEWEN MINING INC | GPT vs. PPHE HOTEL GROUP | GPT vs. Pebblebrook Hotel Trust | GPT vs. Meli Hotels International |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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