Correlation Between Kawasaki Kisen and SCIENCE IN

Can any of the company-specific risk be diversified away by investing in both Kawasaki Kisen and SCIENCE IN 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 SCIENCE IN 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 SCIENCE IN SPORT, you can compare the effects of market volatilities on Kawasaki Kisen and SCIENCE IN 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 SCIENCE IN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kawasaki Kisen and SCIENCE IN.

Diversification Opportunities for Kawasaki Kisen and SCIENCE IN

0.1

Correlation Coefficient

Kawasaki Kisen  SCIENCE IN

Average diversification

The 3 months correlation between Kawasaki and SCIENCE is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Kawasaki Kisen Kaisha and SCIENCE IN SPORT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCIENCE IN SPORT 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 SCIENCE IN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCIENCE IN SPORT has no effect on the direction of Kawasaki Kisen i.e., Kawasaki Kisen and SCIENCE IN go up and down completely randomly.

Pair Corralation between Kawasaki Kisen and SCIENCE IN

Assuming the 90 days trading horizon Kawasaki Kisen is expected to generate 1.64 times less return on investment than SCIENCE IN. But when comparing it to its historical volatility, Kawasaki Kisen Kaisha is 1.85 times less risky than SCIENCE IN. It trades about 0.06 of its potential returns per unit of risk. SCIENCE IN SPORT is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  14.00  in SCIENCE IN SPORT on October 21, 2024 and sell it today you would earn a total of  13.00  from holding SCIENCE IN SPORT or generate 92.86% return on investment over 90 days.

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

Kawasaki Kisen Kaisha  vs.  SCIENCE IN SPORT

Kawasaki Kisen Kaisha

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kawasaki Kisen Kaisha has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile 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.

SCIENCE IN SPORT

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SCIENCE IN SPORT are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, SCIENCE IN is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Kawasaki Kisen and SCIENCE IN

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

The idea behind Kawasaki Kisen Kaisha and SCIENCE IN SPORT 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 CEOs Directory module to screen CEOs from public companies around the world.