Correlation Between SohuCom and Konami Holdings
Can any of the company-specific risk be diversified away by investing in both SohuCom and Konami Holdings 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 SohuCom and Konami Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SohuCom and Konami Holdings, you can compare the effects of market volatilities on SohuCom and Konami Holdings 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 SohuCom with a short position of Konami Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of SohuCom and Konami Holdings.
Diversification Opportunities for SohuCom and Konami Holdings
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SohuCom and Konami is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding SohuCom and Konami Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konami Holdings and SohuCom 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 SohuCom are associated (or correlated) with Konami Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konami Holdings has no effect on the direction of SohuCom i.e., SohuCom and Konami Holdings go up and down completely randomly.
Pair Corralation between SohuCom and Konami Holdings
Given the investment horizon of 90 days SohuCom is expected to under-perform the Konami Holdings. But the stock apears to be less risky and, when comparing its historical volatility, SohuCom is 1.2 times less risky than Konami Holdings. The stock trades about -0.05 of its potential returns per unit of risk. The Konami Holdings is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 4,642 in Konami Holdings on November 3, 2024 and sell it today you would lose (52.00) from holding Konami Holdings or give up 1.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
SohuCom vs. Konami Holdings
Performance |
| Timeline |
| SohuCom |
| Konami Holdings |
SohuCom and Konami Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SohuCom and Konami Holdings
The main advantage of trading using opposite SohuCom and Konami Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SohuCom position performs unexpectedly, Konami Holdings 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 Konami Holdings will offset losses from the drop in Konami Holdings' long position.| SohuCom vs. Snail, Class A | SohuCom vs. Playstudios | SohuCom vs. Playtika Holding Corp | SohuCom vs. Doubledown Interactive Co |
| Konami Holdings vs. NEXON Co | Konami Holdings vs. Sega Sammy Holdings | Konami Holdings vs. Capcom Co Ltd | Konami Holdings vs. CD Projekt SA |
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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