Correlation Between AdvanSix and Kuraray

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

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

Diversification Opportunities for AdvanSix and Kuraray

0.58

Correlation Coefficient

AdvanSix  Kuraray

Very weak diversification

The 3 months correlation between AdvanSix and Kuraray is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding AdvanSix and Kuraray Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuraray and AdvanSix 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 AdvanSix are associated (or correlated) with Kuraray. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuraray has no effect on the direction of AdvanSix i.e., AdvanSix and Kuraray go up and down completely randomly.

Pair Corralation between AdvanSix and Kuraray

Given the investment horizon of 90 days AdvanSix is expected to under-perform the Kuraray. But the stock apears to be less risky and, when comparing its historical volatility, AdvanSix is 1.65 times less risky than Kuraray. The stock trades about -0.13 of its potential returns per unit of risk. The Kuraray Co is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  4,600  in Kuraray Co on December 30, 2024 and sell it today you would lose (840.00) from holding Kuraray Co or give up 18.26% of portfolio value over 90 days.

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

AdvanSix  vs.  Kuraray Co

AdvanSix

Risk-Adjusted Performance

Very Weak

Over the last 90 days AdvanSix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Kuraray

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kuraray Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with AdvanSix and Kuraray

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

The idea behind AdvanSix and Kuraray 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.

Check out your portfolio center.

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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..