Correlation Between Kuraray and ASP Isotopes

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

By analyzing existing cross correlation between Kuraray Co and ASP Isotopes Common, you can compare the effects of market volatilities on Kuraray and ASP Isotopes 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 Kuraray with a short position of ASP Isotopes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuraray and ASP Isotopes.

Diversification Opportunities for Kuraray and ASP Isotopes

0.59

Correlation Coefficient

Kuraray  ASP Isotopes

Very weak diversification

The 3 months correlation between Kuraray and ASP is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Kuraray Co and ASP Isotopes Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASP Isotopes Common and Kuraray 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 Kuraray Co are associated (or correlated) with ASP Isotopes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASP Isotopes Common has no effect on the direction of Kuraray i.e., Kuraray and ASP Isotopes go up and down completely randomly.

Pair Corralation between Kuraray and ASP Isotopes

Assuming the 90 days horizon Kuraray Co is expected to under-perform the ASP Isotopes. But the pink sheet apears to be less risky and, when comparing its historical volatility, Kuraray Co is 2.0 times less risky than ASP Isotopes. The pink sheet trades about -0.07 of its potential returns per unit of risk. The ASP Isotopes Common is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  458.00  in ASP Isotopes Common on December 28, 2024 and sell it today you would lose (36.50) from holding ASP Isotopes Common or give up 7.97% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Kuraray Co  vs.  ASP Isotopes Common

Kuraray

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kuraray Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

ASP Isotopes Common

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ASP Isotopes Common are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile basic indicators, ASP Isotopes may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Kuraray and ASP Isotopes

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

The idea behind Kuraray Co and ASP Isotopes Common 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 Global Correlations module to find global opportunities by holding instruments from different markets.