Correlation Between KION GROUP and Hitachi
Can any of the company-specific risk be diversified away by investing in both KION GROUP and Hitachi 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 KION GROUP and Hitachi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KION GROUP AG and Hitachi, you can compare the effects of market volatilities on KION GROUP and Hitachi 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 KION GROUP with a short position of Hitachi. Check out your portfolio center. Please also check ongoing floating volatility patterns of KION GROUP and Hitachi.
Diversification Opportunities for KION GROUP and Hitachi
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KION and Hitachi is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding KION GROUP AG and Hitachi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hitachi and KION GROUP 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 KION GROUP AG are associated (or correlated) with Hitachi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hitachi has no effect on the direction of KION GROUP i.e., KION GROUP and Hitachi go up and down completely randomly.
Pair Corralation between KION GROUP and Hitachi
Assuming the 90 days horizon KION GROUP AG is expected to under-perform the Hitachi. But the otc stock apears to be less risky and, when comparing its historical volatility, KION GROUP AG is 2.75 times less risky than Hitachi. The otc stock trades about 0.0 of its potential returns per unit of risk. The Hitachi is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,585 in Hitachi on September 12, 2024 and sell it today you would lose (52.00) from holding Hitachi or give up 2.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
KION GROUP AG vs. Hitachi
Performance |
| Timeline |
| KION GROUP AG |
| Hitachi |
KION GROUP and Hitachi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KION GROUP and Hitachi
The main advantage of trading using opposite KION GROUP and Hitachi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KION GROUP position performs unexpectedly, Hitachi 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 Hitachi will offset losses from the drop in Hitachi's long position.| KION GROUP vs. Caterpillar | KION GROUP vs. Deere Company | KION GROUP vs. Shyft Group | KION GROUP vs. Nikola Corp |
| Hitachi vs. Arca Continental SAB | Hitachi vs. Becle SA de | Hitachi vs. Aquagold International | Hitachi vs. Morningstar Unconstrained Allocation |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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