Correlation Between Konica Minolta and Recursion Pharmaceuticals

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

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

Diversification Opportunities for Konica Minolta and Recursion Pharmaceuticals

0.2

Correlation Coefficient

Konica Minolta  Recursion Pharmaceuticals

Modest diversification

The 3 months correlation between Konica and Recursion is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Konica Minolta and Recursion Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Recursion Pharmaceuticals 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 Recursion Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Recursion Pharmaceuticals has no effect on the direction of Konica Minolta i.e., Konica Minolta and Recursion Pharmaceuticals go up and down completely randomly.

Pair Corralation between Konica Minolta and Recursion Pharmaceuticals

Assuming the 90 days horizon Konica Minolta is expected to under-perform the Recursion Pharmaceuticals. But the pink sheet apears to be less risky and, when comparing its historical volatility, Konica Minolta is 5.04 times less risky than Recursion Pharmaceuticals. The pink sheet trades about 0.0 of its potential returns per unit of risk. The Recursion Pharmaceuticals is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  610.00  in Recursion Pharmaceuticals on September 18, 2024 and sell it today you would earn a total of  100.00  from holding Recursion Pharmaceuticals or generate 16.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Konica Minolta  vs.  Recursion Pharmaceuticals

Konica Minolta

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Konica Minolta are ranked lower than 21 (%) 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.

Recursion Pharmaceuticals

Risk-Adjusted Performance

2 of 100

Weak

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

Pair Trading with Konica Minolta and Recursion Pharmaceuticals

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

The idea behind Konica Minolta and Recursion Pharmaceuticals 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.