Correlation Between HITACHI STRMACHADR2 and INPOST SA

Can any of the company-specific risk be diversified away by investing in both HITACHI STRMACHADR2 and INPOST SA 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 HITACHI STRMACHADR2 and INPOST SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HITACHI STRMACHADR2 and INPOST SA EO, you can compare the effects of market volatilities on HITACHI STRMACHADR2 and INPOST SA 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 HITACHI STRMACHADR2 with a short position of INPOST SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of HITACHI STRMACHADR2 and INPOST SA.

Diversification Opportunities for HITACHI STRMACHADR2 and INPOST SA

-0.44

Correlation Coefficient

HITACHI STRMACHADR2  INPOST SA

Very good diversification

The 3 months correlation between HITACHI and INPOST is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding HITACHI STRMACHADR2 and INPOST SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INPOST SA EO and HITACHI STRMACHADR2 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 HITACHI STRMACHADR2 are associated (or correlated) with INPOST SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INPOST SA EO has no effect on the direction of HITACHI STRMACHADR2 i.e., HITACHI STRMACHADR2 and INPOST SA go up and down completely randomly.

Pair Corralation between HITACHI STRMACHADR2 and INPOST SA

Assuming the 90 days trading horizon HITACHI STRMACHADR2 is expected to under-perform the INPOST SA. In addition to that, HITACHI STRMACHADR2 is 1.04 times more volatile than INPOST SA EO. It trades about -0.03 of its total potential returns per unit of risk. INPOST SA EO is currently generating about 0.06 per unit of volatility. If you would invest  1,170  in INPOST SA EO on October 4, 2024 and sell it today you would earn a total of  452.00  from holding INPOST SA EO or generate 38.63% return on investment over 90 days.

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

HITACHI STRMACHADR2  vs.  INPOST SA EO

HITACHI STRMACHADR2

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HITACHI STRMACHADR2 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, HITACHI STRMACHADR2 is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

INPOST SA EO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INPOST SA EO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, INPOST SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with HITACHI STRMACHADR2 and INPOST SA

The main advantage of trading using opposite HITACHI STRMACHADR2 and INPOST SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HITACHI STRMACHADR2 position performs unexpectedly, INPOST SA 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 INPOST SA will offset losses from the drop in INPOST SA's long position.

The idea behind HITACHI STRMACHADR2 and INPOST SA EO 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.