Correlation Between Sanyo Chemical and MIRAMAR HOTEL

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

By analyzing existing cross correlation between Sanyo Chemical Industries and MIRAMAR HOTEL INV, you can compare the effects of market volatilities on Sanyo Chemical and MIRAMAR HOTEL 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 Sanyo Chemical with a short position of MIRAMAR HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanyo Chemical and MIRAMAR HOTEL.

Diversification Opportunities for Sanyo Chemical and MIRAMAR HOTEL

-0.22

Correlation Coefficient

Sanyo Chemical  MIRAMAR HOTEL

Very good diversification

The 3 months correlation between Sanyo and MIRAMAR is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Sanyo Chemical Industries and MIRAMAR HOTEL INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MIRAMAR HOTEL INV and Sanyo 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 Sanyo Chemical Industries are associated (or correlated) with MIRAMAR HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MIRAMAR HOTEL INV has no effect on the direction of Sanyo Chemical i.e., Sanyo Chemical and MIRAMAR HOTEL go up and down completely randomly.

Pair Corralation between Sanyo Chemical and MIRAMAR HOTEL

Assuming the 90 days horizon Sanyo Chemical Industries is expected to under-perform the MIRAMAR HOTEL. In addition to that, Sanyo Chemical is 1.94 times more volatile than MIRAMAR HOTEL INV. It trades about -0.06 of its total potential returns per unit of risk. MIRAMAR HOTEL INV is currently generating about 0.07 per unit of volatility. If you would invest  112.00  in MIRAMAR HOTEL INV on September 27, 2024 and sell it today you would earn a total of  1.00  from holding MIRAMAR HOTEL INV or generate 0.89% return on investment over 90 days.

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

Sanyo Chemical Industries  vs.  MIRAMAR HOTEL INV

Sanyo Chemical Industries

Risk-Adjusted Performance

0 of 100

Very Weak

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

MIRAMAR HOTEL INV

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MIRAMAR HOTEL INV are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, MIRAMAR HOTEL is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Sanyo Chemical and MIRAMAR HOTEL

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

The idea behind Sanyo Chemical Industries and MIRAMAR HOTEL INV 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.