Correlation Between Sanyo Chemical and Bilfinger
Can any of the company-specific risk be diversified away by investing in both Sanyo Chemical and Bilfinger 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 Bilfinger 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 Bilfinger SE, you can compare the effects of market volatilities on Sanyo Chemical and Bilfinger 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 Bilfinger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanyo Chemical and Bilfinger.
Diversification Opportunities for Sanyo Chemical and Bilfinger
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sanyo and Bilfinger is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Sanyo Chemical Industries and Bilfinger SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bilfinger SE 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 Bilfinger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bilfinger SE has no effect on the direction of Sanyo Chemical i.e., Sanyo Chemical and Bilfinger go up and down completely randomly.
Pair Corralation between Sanyo Chemical and Bilfinger
Assuming the 90 days horizon Sanyo Chemical Industries is expected to under-perform the Bilfinger. But the stock apears to be less risky and, when comparing its historical volatility, Sanyo Chemical Industries is 1.32 times less risky than Bilfinger. The stock trades about -0.01 of its potential returns per unit of risk. The Bilfinger SE is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,524 in Bilfinger SE on September 14, 2024 and sell it today you would earn a total of 2,181 from holding Bilfinger SE or generate 86.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Sanyo Chemical Industries vs. Bilfinger SE
Performance |
| Timeline |
| Sanyo Chemical Industries |
| Bilfinger SE |
Sanyo Chemical and Bilfinger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanyo Chemical and Bilfinger
The main advantage of trading using opposite Sanyo Chemical and Bilfinger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanyo Chemical position performs unexpectedly, Bilfinger 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 Bilfinger will offset losses from the drop in Bilfinger'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 |
| Bilfinger vs. Calibre Mining Corp | Bilfinger vs. Nissan Chemical Corp | Bilfinger vs. KINGBOARD CHEMICAL | Bilfinger vs. Sanyo Chemical Industries |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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