Correlation Between Sanyo Chemical and KINGBOARD CHEMICAL
Can any of the company-specific risk be diversified away by investing in both Sanyo Chemical and KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL, you can compare the effects of market volatilities on Sanyo Chemical and KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanyo Chemical and KINGBOARD CHEMICAL.
Diversification Opportunities for Sanyo Chemical and KINGBOARD CHEMICAL
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sanyo and KINGBOARD is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Sanyo Chemical Industries and KINGBOARD CHEMICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KINGBOARD CHEMICAL has no effect on the direction of Sanyo Chemical i.e., Sanyo Chemical and KINGBOARD CHEMICAL go up and down completely randomly.
Pair Corralation between Sanyo Chemical and KINGBOARD CHEMICAL
Assuming the 90 days horizon Sanyo Chemical Industries is expected to under-perform the KINGBOARD CHEMICAL. But the stock apears to be less risky and, when comparing its historical volatility, Sanyo Chemical Industries is 2.67 times less risky than KINGBOARD CHEMICAL. The stock trades about -0.02 of its potential returns per unit of risk. The KINGBOARD CHEMICAL is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 163.00 in KINGBOARD CHEMICAL on August 26, 2024 and sell it today you would earn a total of 71.00 from holding KINGBOARD CHEMICAL or generate 43.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sanyo Chemical Industries vs. KINGBOARD CHEMICAL
Performance |
| Timeline |
| Sanyo Chemical Industries |
| KINGBOARD CHEMICAL |
Sanyo Chemical and KINGBOARD CHEMICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanyo Chemical and KINGBOARD CHEMICAL
The main advantage of trading using opposite Sanyo Chemical and KINGBOARD CHEMICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanyo Chemical position performs unexpectedly, KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL will offset losses from the drop in KINGBOARD CHEMICAL's long position.| Sanyo Chemical vs. Air Liquide SA | Sanyo Chemical vs. PPG Industries | Sanyo Chemical vs. Albemarle | Sanyo Chemical vs. Superior Plus Corp |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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