Correlation Between THK Co and Komori

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

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

Diversification Opportunities for THK Co and Komori

0.0

Correlation Coefficient

THK Co  Komori

Pay attention - limited upside

The 3 months correlation between THK and Komori is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding THK Co Ltd and Komori in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Komori and THK Co 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 THK Co Ltd are associated (or correlated) with Komori. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Komori has no effect on the direction of THK Co i.e., THK Co and Komori go up and down completely randomly.

Pair Corralation between THK Co and Komori

If you would invest  1,114  in THK Co Ltd on December 4, 2024 and sell it today you would earn a total of  185.00  from holding THK Co Ltd or generate 16.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

THK Co Ltd  vs.  Komori

THK Co

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in THK Co Ltd are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile essential indicators, THK Co may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Komori

Risk-Adjusted Performance

Very Weak

Over the last 90 days Komori has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Komori is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with THK Co and Komori

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

The idea behind THK Co Ltd and Komori 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.