Correlation Between Konica Minolta and FUJIFILM Holdings

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

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

Diversification Opportunities for Konica Minolta and FUJIFILM Holdings

-0.79

Correlation Coefficient

Konica Minolta  FUJIFILM Holdings

Pay attention - limited upside

The 3 months correlation between Konica and FUJIFILM is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Konica Minolta and FUJIFILM Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUJIFILM Holdings and Konica Minolta 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 Konica Minolta are associated (or correlated) with FUJIFILM Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUJIFILM Holdings has no effect on the direction of Konica Minolta i.e., Konica Minolta and FUJIFILM Holdings go up and down completely randomly.

Pair Corralation between Konica Minolta and FUJIFILM Holdings

Assuming the 90 days horizon Konica Minolta is expected to generate 0.25 times more return on investment than FUJIFILM Holdings. However, Konica Minolta is 4.02 times less risky than FUJIFILM Holdings. It trades about -0.16 of its potential returns per unit of risk. FUJIFILM Holdings is currently generating about -0.05 per unit of risk. If you would invest  919.00  in Konica Minolta on October 9, 2024 and sell it today you would lose (71.00) from holding Konica Minolta or give up 7.73% of portfolio value over 90 days.

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

Konica Minolta  vs.  FUJIFILM Holdings

Konica Minolta

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Konica Minolta are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Konica Minolta showed solid returns over the last few months and may actually be approaching a breakup point.

FUJIFILM Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FUJIFILM Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Konica Minolta and FUJIFILM Holdings

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

The idea behind Konica Minolta and FUJIFILM Holdings 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.