Correlation Between Amada and Komori

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

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

Diversification Opportunities for Amada and Komori

0.0

Correlation Coefficient

Amada  Komori

Pay attention - limited upside

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

Pair Corralation between Amada and Komori

If you would invest (100.00) in Komori on December 2, 2024 and sell it today you would earn a total of  100.00  from holding Komori or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Amada Co  vs.  Komori

Amada

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amada Co are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Amada is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Komori

Risk-Adjusted Performance

Very Weak

Over the last 90 days Komori has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Komori is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Amada and Komori

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

The idea behind Amada Co and Komori 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.