Correlation Between Mizuho Financial and KonaTel

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

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

Diversification Opportunities for Mizuho Financial and KonaTel

-0.9

Correlation Coefficient

Mizuho Financial  KonaTel

Pay attention - limited upside

The 3 months correlation between Mizuho and KonaTel is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Mizuho Financial Group and KonaTel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KonaTel and Mizuho Financial 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 Mizuho Financial Group are associated (or correlated) with KonaTel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KonaTel has no effect on the direction of Mizuho Financial i.e., Mizuho Financial and KonaTel go up and down completely randomly.

Pair Corralation between Mizuho Financial and KonaTel

Considering the 90-day investment horizon Mizuho Financial Group is expected to generate 0.26 times more return on investment than KonaTel. However, Mizuho Financial Group is 3.78 times less risky than KonaTel. It trades about 0.06 of its potential returns per unit of risk. KonaTel is currently generating about -0.06 per unit of risk. If you would invest  427.00  in Mizuho Financial Group on September 29, 2024 and sell it today you would earn a total of  62.00  from holding Mizuho Financial Group or generate 14.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	99.21%
Values	Daily Returns

Mizuho Financial Group  vs.  KonaTel

Mizuho Financial

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mizuho Financial Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Mizuho Financial reported solid returns over the last few months and may actually be approaching a breakup point.

KonaTel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KonaTel 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 technical and fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Mizuho Financial and KonaTel

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

The idea behind Mizuho Financial Group and KonaTel 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.