Correlation Between KOKUYO and TRAINLINE PLC
Can any of the company-specific risk be diversified away by investing in both KOKUYO and TRAINLINE PLC 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 KOKUYO and TRAINLINE PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KOKUYO LTD and TRAINLINE PLC LS, you can compare the effects of market volatilities on KOKUYO and TRAINLINE PLC 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 KOKUYO with a short position of TRAINLINE PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of KOKUYO and TRAINLINE PLC.
Diversification Opportunities for KOKUYO and TRAINLINE PLC
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KOKUYO and TRAINLINE is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding KOKUYO LTD and TRAINLINE PLC LS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRAINLINE PLC LS and KOKUYO 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 KOKUYO LTD are associated (or correlated) with TRAINLINE PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRAINLINE PLC LS has no effect on the direction of KOKUYO i.e., KOKUYO and TRAINLINE PLC go up and down completely randomly.
Pair Corralation between KOKUYO and TRAINLINE PLC
Assuming the 90 days horizon KOKUYO LTD is expected to generate 0.48 times more return on investment than TRAINLINE PLC. However, KOKUYO LTD is 2.07 times less risky than TRAINLINE PLC. It trades about -0.09 of its potential returns per unit of risk. TRAINLINE PLC LS is currently generating about -0.16 per unit of risk. If you would invest 1,710 in KOKUYO LTD on November 4, 2024 and sell it today you would lose (60.00) from holding KOKUYO LTD or give up 3.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KOKUYO LTD vs. TRAINLINE PLC LS
Performance |
| Timeline |
| KOKUYO LTD |
| TRAINLINE PLC LS |
KOKUYO and TRAINLINE PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KOKUYO and TRAINLINE PLC
The main advantage of trading using opposite KOKUYO and TRAINLINE PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KOKUYO position performs unexpectedly, TRAINLINE PLC 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 TRAINLINE PLC will offset losses from the drop in TRAINLINE PLC's long position.| KOKUYO vs. CSSC Offshore Marine | KOKUYO vs. PUBLIC STORAGE PRFO | KOKUYO vs. SILVER BULLET DATA | KOKUYO vs. Northern Data AG |
| TRAINLINE PLC vs. Motorcar Parts of | TRAINLINE PLC vs. GRIFFIN MINING LTD | TRAINLINE PLC vs. SERI INDUSTRIAL EO | TRAINLINE PLC vs. GALENA MINING LTD |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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