Correlation Between Kopin and Asahi Group

Can any of the company-specific risk be diversified away by investing in both Kopin and Asahi Group 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 Kopin and Asahi Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kopin and Asahi Group Holdings, you can compare the effects of market volatilities on Kopin and Asahi Group 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 Kopin with a short position of Asahi Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kopin and Asahi Group.

Diversification Opportunities for Kopin and Asahi Group

-0.49

Correlation Coefficient

Kopin  Asahi Group

Very good diversification

The 3 months correlation between Kopin and Asahi is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Kopin and Asahi Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asahi Group Holdings and Kopin 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 Kopin are associated (or correlated) with Asahi Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asahi Group Holdings has no effect on the direction of Kopin i.e., Kopin and Asahi Group go up and down completely randomly.

Pair Corralation between Kopin and Asahi Group

Given the investment horizon of 90 days Kopin is expected to generate 1.28 times more return on investment than Asahi Group. However, Kopin is 1.28 times more volatile than Asahi Group Holdings. It trades about 0.25 of its potential returns per unit of risk. Asahi Group Holdings is currently generating about -0.04 per unit of risk. If you would invest  63.00  in Kopin on September 25, 2024 and sell it today you would earn a total of  66.00  from holding Kopin or generate 104.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Kopin  vs.  Asahi Group Holdings

Kopin

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kopin are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Kopin displayed solid returns over the last few months and may actually be approaching a breakup point.

Asahi Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asahi Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Kopin and Asahi Group

The main advantage of trading using opposite Kopin and Asahi Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kopin position performs unexpectedly, Asahi Group 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 Asahi Group will offset losses from the drop in Asahi Group's long position.

The idea behind Kopin and Asahi Group Holdings 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.

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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.