Correlation Between KOBE STEEL and ScanSource
Can any of the company-specific risk be diversified away by investing in both KOBE STEEL and ScanSource 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 KOBE STEEL and ScanSource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KOBE STEEL LTD and ScanSource, you can compare the effects of market volatilities on KOBE STEEL and ScanSource 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 KOBE STEEL with a short position of ScanSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of KOBE STEEL and ScanSource.
Diversification Opportunities for KOBE STEEL and ScanSource
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KOBE and ScanSource is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding KOBE STEEL LTD and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource and KOBE STEEL 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 KOBE STEEL LTD are associated (or correlated) with ScanSource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ScanSource has no effect on the direction of KOBE STEEL i.e., KOBE STEEL and ScanSource go up and down completely randomly.
Pair Corralation between KOBE STEEL and ScanSource
Assuming the 90 days trading horizon KOBE STEEL LTD is expected to generate 0.39 times more return on investment than ScanSource. However, KOBE STEEL LTD is 2.56 times less risky than ScanSource. It trades about 0.24 of its potential returns per unit of risk. ScanSource is currently generating about -0.15 per unit of risk. If you would invest 969.00 in KOBE STEEL LTD on November 5, 2024 and sell it today you would earn a total of 66.00 from holding KOBE STEEL LTD or generate 6.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KOBE STEEL LTD vs. ScanSource
Performance |
| Timeline |
| KOBE STEEL LTD |
| ScanSource |
KOBE STEEL and ScanSource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KOBE STEEL and ScanSource
The main advantage of trading using opposite KOBE STEEL and ScanSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KOBE STEEL position performs unexpectedly, ScanSource 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 ScanSource will offset losses from the drop in ScanSource's long position.| KOBE STEEL vs. Gaztransport Technigaz SA | KOBE STEEL vs. Yuexiu Transport Infrastructure | KOBE STEEL vs. National Beverage Corp | KOBE STEEL vs. BII Railway Transportation |
| ScanSource vs. Stag Industrial | ScanSource vs. VARIOUS EATERIES LS | ScanSource vs. Coffee Holding Co | ScanSource vs. DATAGROUP SE |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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