Correlation Between NYSE Composite and Kajima Corp
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Kajima Corp 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 NYSE Composite and Kajima Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Kajima Corp ADR, you can compare the effects of market volatilities on NYSE Composite and Kajima Corp 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 NYSE Composite with a short position of Kajima Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Kajima Corp.
Diversification Opportunities for NYSE Composite and Kajima Corp
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Kajima is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Kajima Corp ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kajima Corp ADR and NYSE Composite 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 NYSE Composite are associated (or correlated) with Kajima Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kajima Corp ADR has no effect on the direction of NYSE Composite i.e., NYSE Composite and Kajima Corp go up and down completely randomly.
Pair Corralation between NYSE Composite and Kajima Corp
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.01 times less return on investment than Kajima Corp. But when comparing it to its historical volatility, NYSE Composite is 4.93 times less risky than Kajima Corp. It trades about 0.24 of its potential returns per unit of risk. Kajima Corp ADR is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,709 in Kajima Corp ADR on August 29, 2024 and sell it today you would earn a total of 41.00 from holding Kajima Corp ADR or generate 2.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Kajima Corp ADR
Performance |
| Timeline |
NYSE Composite and Kajima Corp Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Kajima Corp ADR
Pair trading matchups for Kajima Corp
Pair Trading with NYSE Composite and Kajima Corp
The main advantage of trading using opposite NYSE Composite and Kajima Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Kajima Corp 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 Kajima Corp will offset losses from the drop in Kajima Corp's long position.| NYSE Composite vs. Vita Coco | NYSE Composite vs. Franklin Wireless Corp | NYSE Composite vs. Ambev SA ADR | NYSE Composite vs. Toro Co |
| Kajima Corp vs. ACS Actividades De | Kajima Corp vs. IES Holdings | Kajima Corp vs. Acciona SA | Kajima Corp vs. JGC Corp |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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