Correlation Between Hitachi and Seaboard

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

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

Diversification Opportunities for Hitachi and Seaboard

0.53

Correlation Coefficient

Hitachi  Seaboard

Very weak diversification

The 3 months correlation between Hitachi and Seaboard is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Hitachi and Seaboard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seaboard and Hitachi 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 Hitachi are associated (or correlated) with Seaboard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seaboard has no effect on the direction of Hitachi i.e., Hitachi and Seaboard go up and down completely randomly.

Pair Corralation between Hitachi and Seaboard

Assuming the 90 days trading horizon Hitachi is expected to generate 1.06 times less return on investment than Seaboard. In addition to that, Hitachi is 1.56 times more volatile than Seaboard. It trades about 0.08 of its total potential returns per unit of risk. Seaboard is currently generating about 0.13 per unit of volatility. If you would invest  231,790  in Seaboard on April 25, 2025 and sell it today you would earn a total of  30,210  from holding Seaboard or generate 13.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Hitachi  vs.  Seaboard

Hitachi

Risk-Adjusted Performance

Modest

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.

Seaboard

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Seaboard are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Seaboard reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hitachi and Seaboard

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

The idea behind Hitachi and Seaboard 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.