Correlation Between TRI CHEMICAL and Hitachi

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

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

Diversification Opportunities for TRI CHEMICAL and Hitachi

0.57

Correlation Coefficient

TRI CHEMICAL  Hitachi

Very weak diversification

The 3 months correlation between TRI and Hitachi is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding TRI CHEMICAL LABORATINC and Hitachi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hitachi and TRI 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 TRI CHEMICAL LABORATINC are associated (or correlated) with Hitachi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hitachi has no effect on the direction of TRI CHEMICAL i.e., TRI CHEMICAL and Hitachi go up and down completely randomly.

Pair Corralation between TRI CHEMICAL and Hitachi

Assuming the 90 days horizon TRI CHEMICAL LABORATINC is expected to generate 0.9 times more return on investment than Hitachi. However, TRI CHEMICAL LABORATINC is 1.11 times less risky than Hitachi. It trades about 0.15 of its potential returns per unit of risk. Hitachi is currently generating about 0.08 per unit of risk. If you would invest  1,590  in TRI CHEMICAL LABORATINC on April 25, 2025 and sell it today you would earn a total of  330.00  from holding TRI CHEMICAL LABORATINC or generate 20.75% return on investment over 90 days.

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

TRI CHEMICAL LABORATINC  vs.  Hitachi

TRI CHEMICAL LABORATINC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TRI CHEMICAL LABORATINC are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TRI CHEMICAL reported solid returns over the last few months and may actually be approaching a breakup point.

Hitachi

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hitachi are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Hitachi may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with TRI CHEMICAL and Hitachi

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

The idea behind TRI CHEMICAL LABORATINC and Hitachi 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.