Correlation Between Resource America and Kansai Electric
Can any of the company-specific risk be diversified away by investing in both Resource America and Kansai Electric 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 Resource America and Kansai Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Resource America and Kansai Electric Power, you can compare the effects of market volatilities on Resource America and Kansai Electric 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 Resource America with a short position of Kansai Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Resource America and Kansai Electric.
Diversification Opportunities for Resource America and Kansai Electric
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Resource and Kansai is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Resource America and Kansai Electric Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kansai Electric Power and Resource America 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 Resource America are associated (or correlated) with Kansai Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kansai Electric Power has no effect on the direction of Resource America i.e., Resource America and Kansai Electric go up and down completely randomly.
Pair Corralation between Resource America and Kansai Electric
If you would invest 612.00 in Kansai Electric Power on December 30, 2023 and sell it today you would earn a total of 25.00 from holding Kansai Electric Power or generate 4.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Resource America vs. Kansai Electric Power
Performance |
Timeline |
Resource America |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
Kansai Electric Power |
Resource America and Kansai Electric Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Resource America and Kansai Electric
The main advantage of trading using opposite Resource America and Kansai Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Resource America position performs unexpectedly, Kansai Electric 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 Kansai Electric will offset losses from the drop in Kansai Electric's long position.Resource America vs. Compania Cervecerias Unidas | Resource America vs. Vector Group | Resource America vs. Vita Coco | Resource America vs. Funko Inc |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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