Correlation Between GoPro and Kyocera ADR

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

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

Diversification Opportunities for GoPro and Kyocera ADR

-0.6

Correlation Coefficient

GoPro  Kyocera ADR

Excellent diversification

The 3 months correlation between GoPro and Kyocera is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding GoPro Inc and Kyocera ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyocera ADR and GoPro 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 GoPro Inc are associated (or correlated) with Kyocera ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyocera ADR has no effect on the direction of GoPro i.e., GoPro and Kyocera ADR go up and down completely randomly.

Pair Corralation between GoPro and Kyocera ADR

Given the investment horizon of 90 days GoPro Inc is expected to under-perform the Kyocera ADR. In addition to that, GoPro is 2.08 times more volatile than Kyocera ADR. It trades about -0.09 of its total potential returns per unit of risk. Kyocera ADR is currently generating about -0.01 per unit of volatility. If you would invest  5,169  in Kyocera ADR on January 25, 2024 and sell it today you would lose (255.00) from holding Kyocera ADR or give up 4.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	39.07%
Values	Daily Returns

GoPro Inc  vs.  Kyocera ADR

GoPro Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GoPro Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in May 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Kyocera ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kyocera ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, Kyocera ADR is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with GoPro and Kyocera ADR

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

The idea behind GoPro Inc and Kyocera ADR 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 Stocks Directory module to find actively traded stocks across global markets.