Correlation Between Hitachi Construction and SEEK

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

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

Diversification Opportunities for Hitachi Construction and SEEK

0.1

Correlation Coefficient

Hitachi Construction  SEEK

Average diversification

The 3 months correlation between Hitachi and SEEK is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Hitachi Construction Machinery and SEEK Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEEK Limited and Hitachi Construction 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 Construction Machinery are associated (or correlated) with SEEK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEEK Limited has no effect on the direction of Hitachi Construction i.e., Hitachi Construction and SEEK go up and down completely randomly.

Pair Corralation between Hitachi Construction and SEEK

Assuming the 90 days horizon Hitachi Construction is expected to generate 2.22 times less return on investment than SEEK. In addition to that, Hitachi Construction is 1.2 times more volatile than SEEK Limited. It trades about 0.04 of its total potential returns per unit of risk. SEEK Limited is currently generating about 0.11 per unit of volatility. If you would invest  1,250  in SEEK Limited on May 17, 2025 and sell it today you would earn a total of  130.00  from holding SEEK Limited or generate 10.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Hitachi Construction Machinery  vs.  SEEK Limited

Hitachi Construction

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Hitachi Construction Machinery are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Hitachi Construction is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

SEEK Limited

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in SEEK Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, SEEK may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Hitachi Construction and SEEK

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

The idea behind Hitachi Construction Machinery and SEEK Limited 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.