Correlation Between KDDI Corp and Hellenic Telecommunicatio

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

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

Diversification Opportunities for KDDI Corp and Hellenic Telecommunicatio

-0.14

Correlation Coefficient

KDDI Corp  Hellenic Telecommunicatio

Good diversification

The 3 months correlation between KDDI and Hellenic is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding KDDI Corp and Hellenic Telecommunications Or in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hellenic Telecommunicatio and KDDI Corp 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 KDDI Corp are associated (or correlated) with Hellenic Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hellenic Telecommunicatio has no effect on the direction of KDDI Corp i.e., KDDI Corp and Hellenic Telecommunicatio go up and down completely randomly.

Pair Corralation between KDDI Corp and Hellenic Telecommunicatio

Assuming the 90 days horizon KDDI Corp is expected to generate 1.88 times more return on investment than Hellenic Telecommunicatio. However, KDDI Corp is 1.88 times more volatile than Hellenic Telecommunications Org. It trades about 0.08 of its potential returns per unit of risk. Hellenic Telecommunications Org is currently generating about 0.04 per unit of risk. If you would invest  3,000  in KDDI Corp on December 20, 2024 and sell it today you would earn a total of  595.00  from holding KDDI Corp or generate 19.83% return on investment over 90 days.

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

KDDI Corp  vs.  Hellenic Telecommunications Or

KDDI Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in KDDI Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, KDDI Corp reported solid returns over the last few months and may actually be approaching a breakup point.

Hellenic Telecommunicatio

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hellenic Telecommunications Org are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Hellenic Telecommunicatio may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with KDDI Corp and Hellenic Telecommunicatio

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

The idea behind KDDI Corp and Hellenic Telecommunications Org 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.