Correlation Between Kawasaki Kisen and INVITATION HOMES

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Can any of the company-specific risk be diversified away by investing in both Kawasaki Kisen and INVITATION HOMES 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 Kawasaki Kisen and INVITATION HOMES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kawasaki Kisen Kaisha and INVITATION HOMES DL, you can compare the effects of market volatilities on Kawasaki Kisen and INVITATION HOMES 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 Kawasaki Kisen with a short position of INVITATION HOMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kawasaki Kisen and INVITATION HOMES.

Diversification Opportunities for Kawasaki Kisen and INVITATION HOMES

KawasakiINVITATIONDiversified AwayKawasakiINVITATIONDiversified Away100%
0.13
  Correlation Coefficient

Average diversification

The 3 months correlation between Kawasaki and INVITATION is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Kawasaki Kisen Kaisha and INVITATION HOMES DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INVITATION HOMES and Kawasaki Kisen 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 Kawasaki Kisen Kaisha are associated (or correlated) with INVITATION HOMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INVITATION HOMES has no effect on the direction of Kawasaki Kisen i.e., Kawasaki Kisen and INVITATION HOMES go up and down completely randomly.

Pair Corralation between Kawasaki Kisen and INVITATION HOMES

Assuming the 90 days trading horizon Kawasaki Kisen Kaisha is expected to under-perform the INVITATION HOMES. In addition to that, Kawasaki Kisen is 1.37 times more volatile than INVITATION HOMES DL. It trades about -0.05 of its total potential returns per unit of risk. INVITATION HOMES DL is currently generating about -0.03 per unit of volatility. If you would invest  3,051  in INVITATION HOMES DL on October 26, 2024 and sell it today you would lose (111.00) from holding INVITATION HOMES DL or give up 3.64% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy98.33%
ValuesDaily Returns

Kawasaki Kisen Kaisha  vs.  INVITATION HOMES DL

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -50510
JavaScript chart by amCharts 3.21.15KLI1 4IV
       Timeline  
Kawasaki Kisen Kaisha 

Risk-Adjusted Performance

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Over the last 90 days Kawasaki Kisen Kaisha has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's forward indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan1212.51313.5
INVITATION HOMES 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days INVITATION HOMES DL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, INVITATION HOMES is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan28.52929.53030.53131.53232.5

Kawasaki Kisen and INVITATION HOMES Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.39-2.54-1.69-0.84-0.01420.81.622.433.25 0.050.100.15
JavaScript chart by amCharts 3.21.15KLI1 4IV
       Returns  

Pair Trading with Kawasaki Kisen and INVITATION HOMES

The main advantage of trading using opposite Kawasaki Kisen and INVITATION HOMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kawasaki Kisen position performs unexpectedly, INVITATION HOMES 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 INVITATION HOMES will offset losses from the drop in INVITATION HOMES's long position.
The idea behind Kawasaki Kisen Kaisha and INVITATION HOMES DL 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.

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