Correlation Between Konica Minolta and Brother Industries
Can any of the company-specific risk be diversified away by investing in both Konica Minolta and Brother Industries 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 Konica Minolta and Brother Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Konica Minolta and Brother Industries Ltd, you can compare the effects of market volatilities on Konica Minolta and Brother Industries 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 Konica Minolta with a short position of Brother Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Konica Minolta and Brother Industries.
Diversification Opportunities for Konica Minolta and Brother Industries
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Konica and Brother is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Konica Minolta and Brother Industries Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brother Industries and Konica Minolta 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 Konica Minolta are associated (or correlated) with Brother Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brother Industries has no effect on the direction of Konica Minolta i.e., Konica Minolta and Brother Industries go up and down completely randomly.
Pair Corralation between Konica Minolta and Brother Industries
Assuming the 90 days horizon Konica Minolta is expected to under-perform the Brother Industries. In addition to that, Konica Minolta is 1.36 times more volatile than Brother Industries Ltd. It trades about -0.22 of its total potential returns per unit of risk. Brother Industries Ltd is currently generating about -0.3 per unit of volatility. If you would invest 3,584 in Brother Industries Ltd on October 20, 2024 and sell it today you would lose (479.00) from holding Brother Industries Ltd or give up 13.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Konica Minolta vs. Brother Industries Ltd
Performance |
| Timeline |
| Konica Minolta |
| Brother Industries |
Konica Minolta and Brother Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Konica Minolta and Brother Industries
The main advantage of trading using opposite Konica Minolta and Brother Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Konica Minolta position performs unexpectedly, Brother Industries 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 Brother Industries will offset losses from the drop in Brother Industries' long position.| Konica Minolta vs. Consol Energy | Konica Minolta vs. Griffon | Konica Minolta vs. Sun Life Financial | Konica Minolta vs. Minerals Technologies |
| Brother Industries vs. JBG SMITH Properties | Brother Industries vs. Live Ventures | Brother Industries vs. Utah Medical Products | Brother Industries vs. Addus HomeCare |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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