Correlation Between Kansai Electric and Green Stream
Can any of the company-specific risk be diversified away by investing in both Kansai Electric and Green Stream 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 Kansai Electric and Green Stream into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Kansai Electric and Green Stream Holdings, you can compare the effects of market volatilities on Kansai Electric and Green Stream 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 Kansai Electric with a short position of Green Stream. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kansai Electric and Green Stream.
Diversification Opportunities for Kansai Electric and Green Stream
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Kansai and Green is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding The Kansai Electric and Green Stream Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Stream Holdings and Kansai Electric 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 The Kansai Electric are associated (or correlated) with Green Stream. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Stream Holdings has no effect on the direction of Kansai Electric i.e., Kansai Electric and Green Stream go up and down completely randomly.
Pair Corralation between Kansai Electric and Green Stream
Assuming the 90 days horizon Kansai Electric is expected to generate 89.99 times less return on investment than Green Stream. But when comparing it to its historical volatility, The Kansai Electric is 66.79 times less risky than Green Stream. It trades about 0.11 of its potential returns per unit of risk. Green Stream Holdings is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Green Stream Holdings on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Green Stream Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 52.75% |
| Values | Daily Returns |
The Kansai Electric vs. Green Stream Holdings
Performance |
| Timeline |
| Kansai Electric |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Green Stream Holdings |
Kansai Electric and Green Stream Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kansai Electric and Green Stream
The main advantage of trading using opposite Kansai Electric and Green Stream positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kansai Electric position performs unexpectedly, Green Stream 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 Green Stream will offset losses from the drop in Green Stream's long position.| Kansai Electric vs. Titan International | Kansai Electric vs. Topbuild Corp | Kansai Electric vs. Newpark Resources | Kansai Electric vs. MYR Group |
| Green Stream vs. CGE Energy | Green Stream vs. Mass Megawat Wind | Green Stream vs. Clean Vision Corp | Green Stream vs. Atlantic Wind Solar |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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