Correlation Between Sanyo Chemical and Sinopec Shanghai
Can any of the company-specific risk be diversified away by investing in both Sanyo Chemical and Sinopec Shanghai 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 Sinopec Shanghai 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 Sinopec Shanghai Petrochemical, you can compare the effects of market volatilities on Sanyo Chemical and Sinopec Shanghai 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 Sinopec Shanghai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanyo Chemical and Sinopec Shanghai.
Diversification Opportunities for Sanyo Chemical and Sinopec Shanghai
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sanyo and Sinopec is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Sanyo Chemical Industries and Sinopec Shanghai Petrochemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinopec Shanghai Pet 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 Sinopec Shanghai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinopec Shanghai Pet has no effect on the direction of Sanyo Chemical i.e., Sanyo Chemical and Sinopec Shanghai go up and down completely randomly.
Pair Corralation between Sanyo Chemical and Sinopec Shanghai
Assuming the 90 days horizon Sanyo Chemical Industries is expected to under-perform the Sinopec Shanghai. But the stock apears to be less risky and, when comparing its historical volatility, Sanyo Chemical Industries is 4.23 times less risky than Sinopec Shanghai. The stock trades about -0.03 of its potential returns per unit of risk. The Sinopec Shanghai Petrochemical is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 16.00 in Sinopec Shanghai Petrochemical on September 1, 2024 and sell it today you would lose (1.00) from holding Sinopec Shanghai Petrochemical or give up 6.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sanyo Chemical Industries vs. Sinopec Shanghai Petrochemical
Performance |
| Timeline |
| Sanyo Chemical Industries |
| Sinopec Shanghai Pet |
Sanyo Chemical and Sinopec Shanghai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanyo Chemical and Sinopec Shanghai
The main advantage of trading using opposite Sanyo Chemical and Sinopec Shanghai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanyo Chemical position performs unexpectedly, Sinopec Shanghai 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 Sinopec Shanghai will offset losses from the drop in Sinopec Shanghai's long position.| Sanyo Chemical vs. The Sherwin Williams | Sanyo Chemical vs. SIKA AG UNSPADR | Sanyo Chemical vs. LyondellBasell Industries NV | Sanyo Chemical vs. Albemarle |
| Sinopec Shanghai vs. Darden Restaurants | Sinopec Shanghai vs. SBI Insurance Group | Sinopec Shanghai vs. SWISS WATER DECAFFCOFFEE | Sinopec Shanghai vs. Lion One Metals |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |