Correlation Between Sanyo Chemical and Games Workshop
Can any of the company-specific risk be diversified away by investing in both Sanyo Chemical and Games Workshop 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 Games Workshop 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 Games Workshop Group, you can compare the effects of market volatilities on Sanyo Chemical and Games Workshop 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 Games Workshop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanyo Chemical and Games Workshop.
Diversification Opportunities for Sanyo Chemical and Games Workshop
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sanyo and Games is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Sanyo Chemical Industries and Games Workshop Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Games Workshop 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 Games Workshop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Games Workshop Group has no effect on the direction of Sanyo Chemical i.e., Sanyo Chemical and Games Workshop go up and down completely randomly.
Pair Corralation between Sanyo Chemical and Games Workshop
Assuming the 90 days horizon Sanyo Chemical Industries is expected to generate 0.45 times more return on investment than Games Workshop. However, Sanyo Chemical Industries is 2.21 times less risky than Games Workshop. It trades about -0.14 of its potential returns per unit of risk. Games Workshop Group is currently generating about -0.08 per unit of risk. If you would invest 2,440 in Sanyo Chemical Industries on August 24, 2024 and sell it today you would lose (60.00) from holding Sanyo Chemical Industries or give up 2.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sanyo Chemical Industries vs. Games Workshop Group
Performance |
| Timeline |
| Sanyo Chemical Industries |
| Games Workshop Group |
Sanyo Chemical and Games Workshop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanyo Chemical and Games Workshop
The main advantage of trading using opposite Sanyo Chemical and Games Workshop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanyo Chemical position performs unexpectedly, Games Workshop 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 Games Workshop will offset losses from the drop in Games Workshop's long position.| Sanyo Chemical vs. Zoom Video Communications | Sanyo Chemical vs. Salesforce | Sanyo Chemical vs. PTT Global Chemical | Sanyo Chemical vs. Eastman Chemical |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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