Correlation Between SHIONOGI and Hanison Construction

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

By analyzing existing cross correlation between SHIONOGI LTD and Hanison Construction Holdings, you can compare the effects of market volatilities on SHIONOGI and Hanison Construction 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 Hanison Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHIONOGI and Hanison Construction.

Diversification Opportunities for SHIONOGI and Hanison Construction

0.0

Correlation Coefficient

SHIONOGI  Hanison Construction

Pay attention - limited upside

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

Pair Corralation between SHIONOGI and Hanison Construction

Assuming the 90 days trading horizon SHIONOGI LTD is expected to under-perform the Hanison Construction. But the stock apears to be less risky and, when comparing its historical volatility, SHIONOGI LTD is 1.44 times less risky than Hanison Construction. The stock trades about 0.0 of its potential returns per unit of risk. The Hanison Construction Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  8.53  in Hanison Construction Holdings on October 23, 2024 and sell it today you would earn a total of  5.47  from holding Hanison Construction Holdings or generate 64.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

SHIONOGI LTD   vs.  Hanison Construction Holdings

SHIONOGI LTD

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SHIONOGI LTD are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, SHIONOGI may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Hanison Construction

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with SHIONOGI and Hanison Construction

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

The idea behind SHIONOGI LTD and Hanison Construction Holdings 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.

Check out your portfolio center.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.