Correlation Between DAIKIN INDUSTRUNSPADR and FLAT GLASS

Can any of the company-specific risk be diversified away by investing in both DAIKIN INDUSTRUNSPADR and FLAT GLASS 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 DAIKIN INDUSTRUNSPADR and FLAT GLASS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DAIKIN INDUSTRUNSPADR and FLAT GLASS GROUP, you can compare the effects of market volatilities on DAIKIN INDUSTRUNSPADR and FLAT GLASS 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 DAIKIN INDUSTRUNSPADR with a short position of FLAT GLASS. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAIKIN INDUSTRUNSPADR and FLAT GLASS.

Diversification Opportunities for DAIKIN INDUSTRUNSPADR and FLAT GLASS

-0.2

Correlation Coefficient

DAIKIN INDUSTRUNSPADR  FLAT GLASS

Good diversification

The 3 months correlation between DAIKIN and FLAT is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding DAIKIN INDUSTRUNSPADR and FLAT GLASS GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FLAT GLASS GROUP and DAIKIN INDUSTRUNSPADR 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 DAIKIN INDUSTRUNSPADR are associated (or correlated) with FLAT GLASS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FLAT GLASS GROUP has no effect on the direction of DAIKIN INDUSTRUNSPADR i.e., DAIKIN INDUSTRUNSPADR and FLAT GLASS go up and down completely randomly.

Pair Corralation between DAIKIN INDUSTRUNSPADR and FLAT GLASS

Assuming the 90 days trading horizon DAIKIN INDUSTRUNSPADR is expected to under-perform the FLAT GLASS. But the stock apears to be less risky and, when comparing its historical volatility, DAIKIN INDUSTRUNSPADR is 1.48 times less risky than FLAT GLASS. The stock trades about 0.0 of its potential returns per unit of risk. The FLAT GLASS GROUP is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  126.00  in FLAT GLASS GROUP on September 26, 2024 and sell it today you would earn a total of  8.00  from holding FLAT GLASS GROUP or generate 6.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

DAIKIN INDUSTRUNSPADR  vs.  FLAT GLASS GROUP

DAIKIN INDUSTRUNSPADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DAIKIN INDUSTRUNSPADR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's forward indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

FLAT GLASS GROUP

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FLAT GLASS GROUP are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, FLAT GLASS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DAIKIN INDUSTRUNSPADR and FLAT GLASS

The main advantage of trading using opposite DAIKIN INDUSTRUNSPADR and FLAT GLASS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAIKIN INDUSTRUNSPADR position performs unexpectedly, FLAT GLASS 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 FLAT GLASS will offset losses from the drop in FLAT GLASS's long position.

The idea behind DAIKIN INDUSTRUNSPADR and FLAT GLASS GROUP pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.