Correlation Between KORE Group and KDDI Corp

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

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

Diversification Opportunities for KORE Group and KDDI Corp

0.31

Correlation Coefficient

KORE Group  KDDI Corp

Weak diversification

The 3 months correlation between KORE and KDDI is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding KORE Group Holdings and KDDI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KDDI Corp and KORE Group 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 KORE Group Holdings are associated (or correlated) with KDDI Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KDDI Corp has no effect on the direction of KORE Group i.e., KORE Group and KDDI Corp go up and down completely randomly.

Pair Corralation between KORE Group and KDDI Corp

Given the investment horizon of 90 days KORE Group Holdings is expected to under-perform the KDDI Corp. In addition to that, KORE Group is 2.12 times more volatile than KDDI Corp. It trades about 0.0 of its total potential returns per unit of risk. KDDI Corp is currently generating about 0.03 per unit of volatility. If you would invest  2,852  in KDDI Corp on October 22, 2024 and sell it today you would earn a total of  342.00  from holding KDDI Corp or generate 11.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	74.4%
Values	Daily Returns

KORE Group Holdings  vs.  KDDI Corp

KORE Group Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in KORE Group Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting basic indicators, KORE Group exhibited solid returns over the last few months and may actually be approaching a breakup point.

KDDI Corp

Risk-Adjusted Performance

1 of 100

Weak

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

Pair Trading with KORE Group and KDDI Corp

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

The idea behind KORE Group Holdings and KDDI Corp 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.