Correlation Between Stellar and Konica Minolta
Can any of the company-specific risk be diversified away by investing in both Stellar 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 Stellar and Konica Minolta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stellar and Konica Minolta, you can compare the effects of market volatilities on Stellar 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 Stellar with a short position of Konica Minolta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stellar and Konica Minolta.
Diversification Opportunities for Stellar and Konica Minolta
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stellar and Konica is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Stellar and Konica Minolta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konica Minolta and Stellar 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 Stellar 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 Stellar i.e., Stellar and Konica Minolta go up and down completely randomly.
Pair Corralation between Stellar and Konica Minolta
Assuming the 90 days trading horizon Stellar is expected to generate 6.17 times more return on investment than Konica Minolta. However, Stellar is 6.17 times more volatile than Konica Minolta. It trades about 0.21 of its potential returns per unit of risk. Konica Minolta is currently generating about -0.28 per unit of risk. If you would invest 36.00 in Stellar on October 21, 2024 and sell it today you would earn a total of 13.00 from holding Stellar or generate 36.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 80.95% |
| Values | Daily Returns |
Stellar vs. Konica Minolta
Performance |
| Timeline |
| Stellar |
| Konica Minolta |
Stellar and Konica Minolta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stellar and Konica Minolta
The main advantage of trading using opposite Stellar and Konica Minolta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stellar 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.The idea behind Stellar and Konica Minolta pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Konica Minolta vs. FUJIFILM Holdings | Konica Minolta vs. Avery Dennison Corp | Konica Minolta vs. KOKUYO LTD | Konica Minolta vs. Takkt AG |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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