Correlation Between KOMATSU and GOING PUBL

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

By analyzing existing cross correlation between KOMATSU LTD SPONS and GOING PUBL MEDIA, you can compare the effects of market volatilities on KOMATSU and GOING PUBL 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 KOMATSU with a short position of GOING PUBL. Check out your portfolio center. Please also check ongoing floating volatility patterns of KOMATSU and GOING PUBL.

Diversification Opportunities for KOMATSU and GOING PUBL

-0.72

Correlation Coefficient

KOMATSU  GOING PUBL

Pay attention - limited upside

The 3 months correlation between KOMATSU and GOING is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding KOMATSU LTD SPONS and GOING PUBL MEDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOING PUBL MEDIA and KOMATSU 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 KOMATSU LTD SPONS are associated (or correlated) with GOING PUBL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOING PUBL MEDIA has no effect on the direction of KOMATSU i.e., KOMATSU and GOING PUBL go up and down completely randomly.

Pair Corralation between KOMATSU and GOING PUBL

Assuming the 90 days trading horizon KOMATSU LTD SPONS is expected to generate 0.92 times more return on investment than GOING PUBL. However, KOMATSU LTD SPONS is 1.09 times less risky than GOING PUBL. It trades about 0.04 of its potential returns per unit of risk. GOING PUBL MEDIA is currently generating about -0.02 per unit of risk. If you would invest  2,217  in KOMATSU LTD SPONS on October 3, 2024 and sell it today you would earn a total of  403.00  from holding KOMATSU LTD SPONS or generate 18.18% return on investment over 90 days.

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

KOMATSU LTD SPONS  vs.  GOING PUBL MEDIA

KOMATSU LTD SPONS

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in KOMATSU LTD SPONS are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, KOMATSU may actually be approaching a critical reversion point that can send shares even higher in February 2025.

GOING PUBL MEDIA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GOING PUBL MEDIA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with KOMATSU and GOING PUBL

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

The idea behind KOMATSU LTD SPONS and GOING PUBL MEDIA 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.