Correlation Between Ricoh Company and Konica Minolta
Can any of the company-specific risk be diversified away by investing in both Ricoh Company and Konica Minolta 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 Ricoh Company and Konica Minolta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ricoh Company and Konica Minolta, you can compare the effects of market volatilities on Ricoh Company and Konica Minolta 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 Ricoh Company with a short position of Konica Minolta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ricoh Company and Konica Minolta.
Diversification Opportunities for Ricoh Company and Konica Minolta
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ricoh and Konica is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Ricoh Company and Konica Minolta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konica Minolta and Ricoh Company 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 Ricoh Company are associated (or correlated) with Konica Minolta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konica Minolta has no effect on the direction of Ricoh Company i.e., Ricoh Company and Konica Minolta go up and down completely randomly.
Pair Corralation between Ricoh Company and Konica Minolta
Assuming the 90 days horizon Ricoh Company is expected to generate 0.92 times more return on investment than Konica Minolta. However, Ricoh Company is 1.08 times less risky than Konica Minolta. It trades about 0.05 of its potential returns per unit of risk. Konica Minolta is currently generating about 0.02 per unit of risk. If you would invest 780.00 in Ricoh Company on September 3, 2024 and sell it today you would earn a total of 356.00 from holding Ricoh Company or generate 45.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.17% |
| Values | Daily Returns |
Ricoh Company vs. Konica Minolta
Performance |
| Timeline |
| Ricoh Company |
| Konica Minolta |
Ricoh Company and Konica Minolta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ricoh Company and Konica Minolta
The main advantage of trading using opposite Ricoh Company and Konica Minolta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ricoh Company position performs unexpectedly, Konica Minolta 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 Konica Minolta will offset losses from the drop in Konica Minolta's long position.| Ricoh Company vs. Konica Minolta | Ricoh Company vs. Seiko Epson Corp | Ricoh Company vs. Fujitsu Ltd ADR | Ricoh Company vs. Kawasaki Heavy Industries |
| Konica Minolta vs. Ricoh Company | Konica Minolta vs. Kawasaki Heavy Industries | Konica Minolta vs. Kajima Corp ADR | Konica Minolta vs. Nitto Denko 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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