Correlation Between HOYA and SHIONOGI

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

By analyzing existing cross correlation between HOYA Corporation and SHIONOGI LTD , you can compare the effects of market volatilities on HOYA and SHIONOGI 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 HOYA with a short position of SHIONOGI. Check out your portfolio center. Please also check ongoing floating volatility patterns of HOYA and SHIONOGI.

Diversification Opportunities for HOYA and SHIONOGI

-0.44

Correlation Coefficient

HOYA  SHIONOGI

Very good diversification

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

Pair Corralation between HOYA and SHIONOGI

Assuming the 90 days horizon HOYA Corporation is expected to under-perform the SHIONOGI. In addition to that, HOYA is 1.25 times more volatile than SHIONOGI LTD . It trades about -0.02 of its total potential returns per unit of risk. SHIONOGI LTD is currently generating about 0.06 per unit of volatility. If you would invest  1,240  in SHIONOGI LTD on September 26, 2024 and sell it today you would earn a total of  20.00  from holding SHIONOGI LTD or generate 1.61% return on investment over 90 days.

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

HOYA Corp.  vs.  SHIONOGI LTD

HOYA

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HOYA Corporation are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, HOYA reported solid returns over the last few months and may actually be approaching a breakup point.

SHIONOGI LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SHIONOGI LTD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, SHIONOGI is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with HOYA and SHIONOGI

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

The idea behind HOYA Corporation and SHIONOGI 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.