Correlation Between Sharp Corp and Kyocera

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

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

Diversification Opportunities for Sharp Corp and Kyocera

0.34

Correlation Coefficient

Sharp Corp  Kyocera

Weak diversification

The 3 months correlation between Sharp and Kyocera is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Sharp Corp ADR and Kyocera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyocera and Sharp Corp 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 Sharp Corp ADR are associated (or correlated) with Kyocera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyocera has no effect on the direction of Sharp Corp i.e., Sharp Corp and Kyocera go up and down completely randomly.

Pair Corralation between Sharp Corp and Kyocera

Assuming the 90 days horizon Sharp Corp ADR is expected to generate 1.84 times more return on investment than Kyocera. However, Sharp Corp is 1.84 times more volatile than Kyocera. It trades about 0.02 of its potential returns per unit of risk. Kyocera is currently generating about -0.09 per unit of risk. If you would invest  156.00  in Sharp Corp ADR on September 20, 2024 and sell it today you would lose (4.00) from holding Sharp Corp ADR or give up 2.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Sharp Corp ADR  vs.  Kyocera

Sharp Corp ADR

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sharp Corp ADR are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Sharp Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Kyocera

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kyocera has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Sharp Corp and Kyocera

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

The idea behind Sharp Corp ADR and Kyocera 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.