Correlation Between Sanyo Chemical and China Railway
Can any of the company-specific risk be diversified away by investing in both Sanyo Chemical and China Railway 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 China Railway 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 China Railway Construction, you can compare the effects of market volatilities on Sanyo Chemical and China Railway 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 China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanyo Chemical and China Railway.
Diversification Opportunities for Sanyo Chemical and China Railway
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sanyo and China is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Sanyo Chemical Industries and China Railway Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Railway Constr 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 China Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Railway Constr has no effect on the direction of Sanyo Chemical i.e., Sanyo Chemical and China Railway go up and down completely randomly.
Pair Corralation between Sanyo Chemical and China Railway
If you would invest 2,440 in Sanyo Chemical Industries on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Sanyo Chemical Industries or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Sanyo Chemical Industries vs. China Railway Construction
Performance |
| Timeline |
| Sanyo Chemical Industries |
| China Railway Constr |
Sanyo Chemical and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanyo Chemical and China Railway
The main advantage of trading using opposite Sanyo Chemical and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanyo Chemical position performs unexpectedly, China Railway 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 China Railway will offset losses from the drop in China Railway's long position.| Sanyo Chemical vs. X FAB Silicon Foundries | Sanyo Chemical vs. Quaker Chemical | Sanyo Chemical vs. Mitsubishi Gas Chemical | Sanyo Chemical vs. Shin Etsu Chemical Co |
| China Railway vs. Marie Brizard Wine | China Railway vs. IMAGIN MEDICAL INC | China Railway vs. Treasury Wine Estates | China Railway vs. NAKED WINES PLC |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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