Correlation Between NYSE Composite and Kansai Paint
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Kansai Paint 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 Kansai Paint into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Kansai Paint Co, you can compare the effects of market volatilities on NYSE Composite and Kansai Paint 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 Kansai Paint. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Kansai Paint.
Diversification Opportunities for NYSE Composite and Kansai Paint
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Kansai is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Kansai Paint Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kansai Paint 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 Kansai Paint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kansai Paint has no effect on the direction of NYSE Composite i.e., NYSE Composite and Kansai Paint go up and down completely randomly.
Pair Corralation between NYSE Composite and Kansai Paint
If you would invest 1,941,627 in NYSE Composite on August 31, 2024 and sell it today you would earn a total of 85,577 from holding NYSE Composite or generate 4.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
NYSE Composite vs. Kansai Paint Co
Performance |
| Timeline |
NYSE Composite and Kansai Paint Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Kansai Paint Co
Pair trading matchups for Kansai Paint
Pair Trading with NYSE Composite and Kansai Paint
The main advantage of trading using opposite NYSE Composite and Kansai Paint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Kansai Paint 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 Kansai Paint will offset losses from the drop in Kansai Paint's long position.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Kansai Paint vs. PPG Industries | Kansai Paint vs. Air Products and | Kansai Paint vs. Linde plc Ordinary | Kansai Paint vs. Ecolab Inc |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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