Correlation Between Sany Heavy and Komatsu
Can any of the company-specific risk be diversified away by investing in both Sany Heavy and Komatsu 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 Sany Heavy and Komatsu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sany Heavy Equipment and Komatsu, you can compare the effects of market volatilities on Sany Heavy and Komatsu 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 Sany Heavy with a short position of Komatsu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sany Heavy and Komatsu.
Diversification Opportunities for Sany Heavy and Komatsu
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sany and Komatsu is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Sany Heavy Equipment and Komatsu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Komatsu and Sany Heavy 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 Sany Heavy Equipment are associated (or correlated) with Komatsu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Komatsu has no effect on the direction of Sany Heavy i.e., Sany Heavy and Komatsu go up and down completely randomly.
Pair Corralation between Sany Heavy and Komatsu
Assuming the 90 days horizon Sany Heavy is expected to generate 4.63 times less return on investment than Komatsu. In addition to that, Sany Heavy is 1.46 times more volatile than Komatsu. It trades about 0.02 of its total potential returns per unit of risk. Komatsu is currently generating about 0.11 per unit of volatility. If you would invest 2,410 in Komatsu on September 3, 2024 and sell it today you would earn a total of 121.00 from holding Komatsu or generate 5.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sany Heavy Equipment vs. Komatsu
Performance |
| Timeline |
| Sany Heavy Equipment |
| Komatsu |
Sany Heavy and Komatsu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sany Heavy and Komatsu
The main advantage of trading using opposite Sany Heavy and Komatsu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sany Heavy position performs unexpectedly, Komatsu 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 Komatsu will offset losses from the drop in Komatsu's long position.| Sany Heavy vs. United Rentals | Sany Heavy vs. SHIP HEALTHCARE HLDGINC | Sany Heavy vs. Air Lease | Sany Heavy vs. DXC Technology Co |
| Komatsu vs. Transportadora de Gas | Komatsu vs. Air Transport Services | Komatsu vs. RYU Apparel | Komatsu vs. NTG Nordic Transport |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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