Correlation Between SEKISUI CHEMICAL and Sysco Corp

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

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

Diversification Opportunities for SEKISUI CHEMICAL and Sysco Corp

0.12

Correlation Coefficient

SEKISUI CHEMICAL  Sysco Corp

Average diversification

The 3 months correlation between SEKISUI and Sysco is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding SEKISUI CHEMICAL and Sysco Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sysco Corp 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 Sysco Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sysco Corp has no effect on the direction of SEKISUI CHEMICAL i.e., SEKISUI CHEMICAL and Sysco Corp go up and down completely randomly.

Pair Corralation between SEKISUI CHEMICAL and Sysco Corp

Assuming the 90 days trading horizon SEKISUI CHEMICAL is expected to generate 1.34 times more return on investment than Sysco Corp. However, SEKISUI CHEMICAL is 1.34 times more volatile than Sysco Corp. It trades about 0.09 of its potential returns per unit of risk. Sysco Corp is currently generating about -0.11 per unit of risk. If you would invest  1,470  in SEKISUI CHEMICAL on December 22, 2024 and sell it today you would earn a total of  150.00  from holding SEKISUI CHEMICAL or generate 10.2% return on investment over 90 days.

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

SEKISUI CHEMICAL  vs.  Sysco Corp

SEKISUI CHEMICAL

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SEKISUI CHEMICAL are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile forward indicators, SEKISUI CHEMICAL may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Sysco Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sysco Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with SEKISUI CHEMICAL and Sysco Corp

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

The idea behind SEKISUI CHEMICAL and Sysco Corp 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.