Correlation Between MicroStrategy Incorporated and Sekisui House

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

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

Diversification Opportunities for MicroStrategy Incorporated and Sekisui House

0.56

Correlation Coefficient

MicroStrategy Incorporated  Sekisui House

Very weak diversification

The 3 months correlation between MicroStrategy and Sekisui is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding MicroStrategy Incorporated and Sekisui House Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sekisui House and MicroStrategy Incorporated 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 MicroStrategy Incorporated 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 MicroStrategy Incorporated i.e., MicroStrategy Incorporated and Sekisui House go up and down completely randomly.

Pair Corralation between MicroStrategy Incorporated and Sekisui House

Given the investment horizon of 90 days MicroStrategy Incorporated is expected to under-perform the Sekisui House. In addition to that, MicroStrategy Incorporated is 4.61 times more volatile than Sekisui House Ltd. It trades about -0.09 of its total potential returns per unit of risk. Sekisui House Ltd is currently generating about -0.07 per unit of volatility. If you would invest  2,396  in Sekisui House Ltd on December 1, 2024 and sell it today you would lose (132.00) from holding Sekisui House Ltd or give up 5.51% of portfolio value over 90 days.

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

MicroStrategy Incorporated  vs.  Sekisui House Ltd

MicroStrategy Incorporated

Risk-Adjusted Performance

Very Weak

Over the last 90 days MicroStrategy Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

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 MicroStrategy Incorporated and Sekisui House

The main advantage of trading using opposite MicroStrategy Incorporated and Sekisui House positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MicroStrategy Incorporated 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 MicroStrategy Incorporated 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.