Correlation Between KONE Oyj and Fanuc
Can any of the company-specific risk be diversified away by investing in both KONE Oyj and Fanuc 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 KONE Oyj and Fanuc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KONE Oyj and Fanuc, you can compare the effects of market volatilities on KONE Oyj and Fanuc 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 KONE Oyj with a short position of Fanuc. Check out your portfolio center. Please also check ongoing floating volatility patterns of KONE Oyj and Fanuc.
Diversification Opportunities for KONE Oyj and Fanuc
Good diversification
The 3 months correlation between KONE and Fanuc is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding KONE Oyj and Fanuc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fanuc and KONE Oyj 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 KONE Oyj are associated (or correlated) with Fanuc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fanuc has no effect on the direction of KONE Oyj i.e., KONE Oyj and Fanuc go up and down completely randomly.
Pair Corralation between KONE Oyj and Fanuc
Assuming the 90 days horizon KONE Oyj is expected to under-perform the Fanuc. But the pink sheet apears to be less risky and, when comparing its historical volatility, KONE Oyj is 1.33 times less risky than Fanuc. The pink sheet trades about -0.03 of its potential returns per unit of risk. The Fanuc is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,397 in Fanuc on August 29, 2024 and sell it today you would lose (45.00) from holding Fanuc or give up 3.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KONE Oyj vs. Fanuc
Performance |
| Timeline |
| KONE Oyj |
| Fanuc |
KONE Oyj and Fanuc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KONE Oyj and Fanuc
The main advantage of trading using opposite KONE Oyj and Fanuc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KONE Oyj position performs unexpectedly, Fanuc 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 Fanuc will offset losses from the drop in Fanuc's long position.| KONE Oyj vs. Spirax Sarco Engineering PLC | KONE Oyj vs. Atlas Copco ADR | KONE Oyj vs. Vestas Wind Systems | KONE Oyj vs. IDEX Corporation |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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