Correlation Between Konan Technology and PlayD

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

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

Diversification Opportunities for Konan Technology and PlayD

0.35

Correlation Coefficient

Konan Technology  PlayD

Weak diversification

The 3 months correlation between Konan and PlayD is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Konan Technology and PlayD Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PlayD and Konan Technology 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 Konan Technology are associated (or correlated) with PlayD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PlayD has no effect on the direction of Konan Technology i.e., Konan Technology and PlayD go up and down completely randomly.

Pair Corralation between Konan Technology and PlayD

Assuming the 90 days trading horizon Konan Technology is expected to generate 1.1 times more return on investment than PlayD. However, Konan Technology is 1.1 times more volatile than PlayD Co. It trades about 0.24 of its potential returns per unit of risk. PlayD Co is currently generating about 0.11 per unit of risk. If you would invest  1,375,000  in Konan Technology on September 5, 2024 and sell it today you would earn a total of  1,115,000  from holding Konan Technology or generate 81.09% return on investment over 90 days.

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

Konan Technology  vs.  PlayD Co

Konan Technology

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Konan Technology are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Konan Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

PlayD

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PlayD Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, PlayD sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Konan Technology and PlayD

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

The idea behind Konan Technology and PlayD Co 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.