Correlation Between Estrella Immunopharma and Sekisui House

Can any of the company-specific risk be diversified away by investing in both Estrella Immunopharma and Sekisui House 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 Estrella Immunopharma and Sekisui House into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Estrella Immunopharma and Sekisui House Ltd, you can compare the effects of market volatilities on Estrella Immunopharma and Sekisui House 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 Estrella Immunopharma with a short position of Sekisui House. Check out your portfolio center. Please also check ongoing floating volatility patterns of Estrella Immunopharma and Sekisui House.

Diversification Opportunities for Estrella Immunopharma and Sekisui House

-0.59

Correlation Coefficient

Estrella Immunopharma  Sekisui House

Excellent diversification

The 3 months correlation between Estrella and Sekisui is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Estrella Immunopharma and Sekisui House Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sekisui House and Estrella Immunopharma 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 Estrella Immunopharma are associated (or correlated) with Sekisui House. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sekisui House has no effect on the direction of Estrella Immunopharma i.e., Estrella Immunopharma and Sekisui House go up and down completely randomly.

Pair Corralation between Estrella Immunopharma and Sekisui House

Assuming the 90 days horizon Estrella Immunopharma is expected to generate 18.66 times more return on investment than Sekisui House. However, Estrella Immunopharma is 18.66 times more volatile than Sekisui House Ltd. It trades about 0.04 of its potential returns per unit of risk. Sekisui House Ltd is currently generating about -0.07 per unit of risk. If you would invest  9.10  in Estrella Immunopharma on December 1, 2024 and sell it today you would lose (3.10) from holding Estrella Immunopharma or give up 34.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	46.67%
Values	Daily Returns

Estrella Immunopharma  vs.  Sekisui House Ltd

Estrella Immunopharma

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Estrella Immunopharma are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Estrella Immunopharma showed solid returns over the last few months and may actually be approaching a breakup point.

Sekisui House

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sekisui House Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Sekisui House is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Estrella Immunopharma and Sekisui House

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

The idea behind Estrella Immunopharma and Sekisui House Ltd 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.

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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.