Correlation Between Khiron Life and Japan Steel

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Can any of the company-specific risk be diversified away by investing in both Khiron Life and Japan Steel 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 Khiron Life and Japan Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Khiron Life Sciences and The Japan Steel, you can compare the effects of market volatilities on Khiron Life and Japan Steel 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 Khiron Life with a short position of Japan Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Khiron Life and Japan Steel.

Diversification Opportunities for Khiron Life and Japan Steel

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Khiron Life and Japan Steel

If you would invest  2.16  in Khiron Life Sciences on October 12, 2024 and sell it today you would earn a total of  0.00  from holding Khiron Life Sciences or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy94.44%
ValuesDaily Returns

Khiron Life Sciences  vs.  The Japan Steel

 Performance 
       Timeline  
Khiron Life Sciences 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Khiron Life Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Khiron Life is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.
Japan Steel 

Risk-Adjusted Performance

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

Khiron Life and Japan Steel Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Khiron Life and Japan Steel

The main advantage of trading using opposite Khiron Life and Japan Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Khiron Life position performs unexpectedly, Japan Steel 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 Japan Steel will offset losses from the drop in Japan Steel's long position.
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The idea behind Khiron Life Sciences and The Japan Steel 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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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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