Correlation Between Sanyo Chemical and CHEMICAL INDUSTRIES

Can any of the company-specific risk be diversified away by investing in both Sanyo Chemical and CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES, you can compare the effects of market volatilities on Sanyo Chemical and CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanyo Chemical and CHEMICAL INDUSTRIES.

Diversification Opportunities for Sanyo Chemical and CHEMICAL INDUSTRIES

0.0

Correlation Coefficient

Sanyo Chemical  CHEMICAL INDUSTRIES

Pay attention - limited upside

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

Pair Corralation between Sanyo Chemical and CHEMICAL INDUSTRIES

If you would invest  2,388  in Sanyo Chemical Industries on December 30, 2024 and sell it today you would earn a total of  12.00  from holding Sanyo Chemical Industries or generate 0.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Sanyo Chemical Industries  vs.  CHEMICAL INDUSTRIES

Sanyo Chemical Industries

Risk-Adjusted Performance

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 latest stock price disturbance, may contribute to mid-run losses for the stockholders.

CHEMICAL INDUSTRIES

Risk-Adjusted Performance

Very Weak

Over the last 90 days CHEMICAL INDUSTRIES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, CHEMICAL INDUSTRIES is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Sanyo Chemical and CHEMICAL INDUSTRIES

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

The idea behind Sanyo Chemical Industries and CHEMICAL INDUSTRIES 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.