Correlation Between Konica Minolta and Secom Co
Can any of the company-specific risk be diversified away by investing in both Konica Minolta and Secom Co 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 Secom Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Konica Minolta and Secom Co Ltd, you can compare the effects of market volatilities on Konica Minolta and Secom Co 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 Secom Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Konica Minolta and Secom Co.
Diversification Opportunities for Konica Minolta and Secom Co
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Konica and Secom is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Konica Minolta and Secom Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Secom Co 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 Secom Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Secom Co has no effect on the direction of Konica Minolta i.e., Konica Minolta and Secom Co go up and down completely randomly.
Pair Corralation between Konica Minolta and Secom Co
Assuming the 90 days horizon Konica Minolta is expected to generate 1.79 times more return on investment than Secom Co. However, Konica Minolta is 1.79 times more volatile than Secom Co Ltd. It trades about 0.04 of its potential returns per unit of risk. Secom Co Ltd is currently generating about 0.02 per unit of risk. If you would invest 665.00 in Konica Minolta on September 4, 2024 and sell it today you would earn a total of 213.00 from holding Konica Minolta or generate 32.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Konica Minolta vs. Secom Co Ltd
Performance |
| Timeline |
| Konica Minolta |
| Secom Co |
Konica Minolta and Secom Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Konica Minolta and Secom Co
The main advantage of trading using opposite Konica Minolta and Secom Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Konica Minolta position performs unexpectedly, Secom Co 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 Secom Co will offset losses from the drop in Secom Co's long position.| Konica Minolta vs. Ricoh Company | Konica Minolta vs. OppFi Inc | Konica Minolta vs. MetLife | Konica Minolta vs. Jackson Financial |
| Secom Co vs. Evolv Technologies Holdings | Secom Co vs. Knightscope | Secom Co vs. Evolv Technologies Holdings | Secom Co vs. NAPCO Security Technologies |
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.
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