Correlation Between Sanyo Chemical and AMAG AUSTRIA
Can any of the company-specific risk be diversified away by investing in both Sanyo Chemical and AMAG AUSTRIA 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 AMAG AUSTRIA 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 AMAG AUSTRIA M, you can compare the effects of market volatilities on Sanyo Chemical and AMAG AUSTRIA 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 AMAG AUSTRIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanyo Chemical and AMAG AUSTRIA.
Diversification Opportunities for Sanyo Chemical and AMAG AUSTRIA
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sanyo and AMAG is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Sanyo Chemical Industries and AMAG AUSTRIA M in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMAG AUSTRIA M 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 AMAG AUSTRIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMAG AUSTRIA M has no effect on the direction of Sanyo Chemical i.e., Sanyo Chemical and AMAG AUSTRIA go up and down completely randomly.
Pair Corralation between Sanyo Chemical and AMAG AUSTRIA
Assuming the 90 days horizon Sanyo Chemical Industries is expected to generate 1.57 times more return on investment than AMAG AUSTRIA. However, Sanyo Chemical is 1.57 times more volatile than AMAG AUSTRIA M. It trades about -0.01 of its potential returns per unit of risk. AMAG AUSTRIA M is currently generating about -0.06 per unit of risk. If you would invest 2,800 in Sanyo Chemical Industries on September 5, 2024 and sell it today you would lose (360.00) from holding Sanyo Chemical Industries or give up 12.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Sanyo Chemical Industries vs. AMAG AUSTRIA M
Performance |
| Timeline |
| Sanyo Chemical Industries |
| AMAG AUSTRIA M |
Sanyo Chemical and AMAG AUSTRIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanyo Chemical and AMAG AUSTRIA
The main advantage of trading using opposite Sanyo Chemical and AMAG AUSTRIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanyo Chemical position performs unexpectedly, AMAG AUSTRIA 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 AMAG AUSTRIA will offset losses from the drop in AMAG AUSTRIA's long position.| Sanyo Chemical vs. COMMERCIAL VEHICLE | Sanyo Chemical vs. Altair Engineering | Sanyo Chemical vs. NORWEGIAN AIR SHUT | Sanyo Chemical vs. FORWARD AIR P |
| AMAG AUSTRIA vs. PRECISION DRILLING P | AMAG AUSTRIA vs. Siamgas And Petrochemicals | AMAG AUSTRIA vs. Sanyo Chemical Industries | AMAG AUSTRIA vs. NISSAN CHEMICAL IND |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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