Correlation Between OFFICE DEPOT and KOBE STEEL
Can any of the company-specific risk be diversified away by investing in both OFFICE DEPOT and KOBE STEEL 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 OFFICE DEPOT and KOBE STEEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OFFICE DEPOT and KOBE STEEL LTD, you can compare the effects of market volatilities on OFFICE DEPOT and KOBE STEEL 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 OFFICE DEPOT with a short position of KOBE STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of OFFICE DEPOT and KOBE STEEL.
Diversification Opportunities for OFFICE DEPOT and KOBE STEEL
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between OFFICE and KOBE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding OFFICE DEPOT and KOBE STEEL LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KOBE STEEL LTD and OFFICE DEPOT 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 OFFICE DEPOT are associated (or correlated) with KOBE STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KOBE STEEL LTD has no effect on the direction of OFFICE DEPOT i.e., OFFICE DEPOT and KOBE STEEL go up and down completely randomly.
Pair Corralation between OFFICE DEPOT and KOBE STEEL
If you would invest 975.00 in KOBE STEEL LTD on November 3, 2024 and sell it today you would earn a total of 80.00 from holding KOBE STEEL LTD or generate 8.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
OFFICE DEPOT vs. KOBE STEEL LTD
Performance |
| Timeline |
| OFFICE DEPOT |
| KOBE STEEL LTD |
OFFICE DEPOT and KOBE STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OFFICE DEPOT and KOBE STEEL
The main advantage of trading using opposite OFFICE DEPOT and KOBE STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OFFICE DEPOT position performs unexpectedly, KOBE STEEL 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 KOBE STEEL will offset losses from the drop in KOBE STEEL's long position.| OFFICE DEPOT vs. Apple Inc | OFFICE DEPOT vs. Apple Inc | OFFICE DEPOT vs. Apple Inc | OFFICE DEPOT vs. Apple 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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