Correlation Between Sanyo Chemical and Repsol
Can any of the company-specific risk be diversified away by investing in both Sanyo Chemical and Repsol 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 Repsol 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 Repsol, you can compare the effects of market volatilities on Sanyo Chemical and Repsol 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 Repsol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanyo Chemical and Repsol.
Diversification Opportunities for Sanyo Chemical and Repsol
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sanyo and Repsol is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Sanyo Chemical Industries and Repsol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Repsol 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 Repsol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Repsol has no effect on the direction of Sanyo Chemical i.e., Sanyo Chemical and Repsol go up and down completely randomly.
Pair Corralation between Sanyo Chemical and Repsol
Assuming the 90 days horizon Sanyo Chemical Industries is expected to generate 0.92 times more return on investment than Repsol. However, Sanyo Chemical Industries is 1.09 times less risky than Repsol. It trades about -0.02 of its potential returns per unit of risk. Repsol is currently generating about -0.02 per unit of risk. If you would invest 2,640 in Sanyo Chemical Industries on September 4, 2024 and sell it today you would lose (200.00) from holding Sanyo Chemical Industries or give up 7.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Sanyo Chemical Industries vs. Repsol
Performance |
| Timeline |
| Sanyo Chemical Industries |
| Repsol |
Sanyo Chemical and Repsol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanyo Chemical and Repsol
The main advantage of trading using opposite Sanyo Chemical and Repsol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanyo Chemical position performs unexpectedly, Repsol 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 Repsol will offset losses from the drop in Repsol's long position.| Sanyo Chemical vs. The Sherwin Williams | Sanyo Chemical vs. Dupont De Nemours | Sanyo Chemical vs. Superior Plus Corp | Sanyo Chemical vs. NMI Holdings |
| Repsol vs. WESTLAKE CHEMICAL | Repsol vs. NH HOTEL GROUP | Repsol vs. Sanyo Chemical Industries | Repsol vs. Eastman Chemical |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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