Correlation Between Shionogi and Shionogi

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

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

Diversification Opportunities for Shionogi and Shionogi

0.3

Correlation Coefficient

Shionogi  Shionogi

Weak diversification

The 3 months correlation between Shionogi and Shionogi is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Shionogi Co Ltd and Shionogi Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shionogi and Shionogi 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 Shionogi Co Ltd 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 has no effect on the direction of Shionogi i.e., Shionogi and Shionogi go up and down completely randomly.

Pair Corralation between Shionogi and Shionogi

Assuming the 90 days horizon Shionogi Co Ltd is expected to under-perform the Shionogi. But the pink sheet apears to be less risky and, when comparing its historical volatility, Shionogi Co Ltd is 25.57 times less risky than Shionogi. The pink sheet trades about -0.08 of its potential returns per unit of risk. The Shionogi Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  4,550  in Shionogi Co on September 14, 2024 and sell it today you would lose (3,140) from holding Shionogi Co or give up 69.01% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Shionogi Co Ltd  vs.  Shionogi Co

Shionogi

Risk-Adjusted Performance

0 of 100

Very Weak

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

Shionogi

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Shionogi Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Shionogi reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Shionogi and Shionogi

The main advantage of trading using opposite Shionogi and Shionogi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shionogi 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 Shionogi Co Ltd and Shionogi Co 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.