Correlation Between SEKISUI CHEMICAL and Mirvac

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

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

Diversification Opportunities for SEKISUI CHEMICAL and Mirvac

-0.54

Correlation Coefficient

SEKISUI CHEMICAL  Mirvac

Excellent diversification

The 3 months correlation between SEKISUI and Mirvac is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding SEKISUI CHEMICAL and Mirvac Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirvac Group and SEKISUI CHEMICAL 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 SEKISUI CHEMICAL are associated (or correlated) with Mirvac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirvac Group has no effect on the direction of SEKISUI CHEMICAL i.e., SEKISUI CHEMICAL and Mirvac go up and down completely randomly.

Pair Corralation between SEKISUI CHEMICAL and Mirvac

Assuming the 90 days trading horizon SEKISUI CHEMICAL is expected to generate 2.03 times more return on investment than Mirvac. However, SEKISUI CHEMICAL is 2.03 times more volatile than Mirvac Group. It trades about 0.19 of its potential returns per unit of risk. Mirvac Group is currently generating about -0.3 per unit of risk. If you would invest  1,490  in SEKISUI CHEMICAL on October 8, 2024 and sell it today you would earn a total of  140.00  from holding SEKISUI CHEMICAL or generate 9.4% return on investment over 90 days.

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

SEKISUI CHEMICAL  vs.  Mirvac Group

SEKISUI CHEMICAL

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SEKISUI CHEMICAL are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain forward indicators, SEKISUI CHEMICAL exhibited solid returns over the last few months and may actually be approaching a breakup point.

Mirvac Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mirvac Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with SEKISUI CHEMICAL and Mirvac

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

The idea behind SEKISUI CHEMICAL and Mirvac Group 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.