Correlation Between Shin Etsu and INTEGR SILICON

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

By analyzing existing cross correlation between Shin Etsu Chemical Co and INTEGR SILICON SOL, you can compare the effects of market volatilities on Shin Etsu and INTEGR SILICON 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 Shin Etsu with a short position of INTEGR SILICON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Etsu and INTEGR SILICON.

Diversification Opportunities for Shin Etsu and INTEGR SILICON

0.0

Correlation Coefficient

Shin Etsu  INTEGR SILICON

Pay attention - limited upside

The 3 months correlation between Shin and INTEGR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Shin Etsu Chemical Co and INTEGR SILICON SOL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTEGR SILICON SOL and Shin Etsu 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 Shin Etsu Chemical Co are associated (or correlated) with INTEGR SILICON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTEGR SILICON SOL has no effect on the direction of Shin Etsu i.e., Shin Etsu and INTEGR SILICON go up and down completely randomly.

Pair Corralation between Shin Etsu and INTEGR SILICON

If you would invest (100.00) in INTEGR SILICON SOL on September 12, 2024 and sell it today you would earn a total of  100.00  from holding INTEGR SILICON SOL or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Shin Etsu Chemical Co  vs.  INTEGR SILICON SOL

Shin Etsu Chemical

Risk-Adjusted Performance

0 of 100

Very Weak

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

INTEGR SILICON SOL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INTEGR SILICON SOL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, INTEGR SILICON is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Shin Etsu and INTEGR SILICON

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

The idea behind Shin Etsu Chemical Co and INTEGR SILICON SOL 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.