Correlation Between Kyocera ADR and Hamilton Beach

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

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

Diversification Opportunities for Kyocera ADR and Hamilton Beach

0.37

Correlation Coefficient

Kyocera ADR  Hamilton Beach

Weak diversification

The 3 months correlation between Kyocera and Hamilton is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Kyocera ADR and Hamilton Beach Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Beach Brands and Kyocera ADR 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 Kyocera ADR are associated (or correlated) with Hamilton Beach. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Beach Brands has no effect on the direction of Kyocera ADR i.e., Kyocera ADR and Hamilton Beach go up and down completely randomly.

Pair Corralation between Kyocera ADR and Hamilton Beach

If you would invest  2,131  in Hamilton Beach Brands on January 17, 2024 and sell it today you would earn a total of  156.00  from holding Hamilton Beach Brands or generate 7.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.76%
Values	Daily Returns

Kyocera ADR  vs.  Hamilton Beach Brands

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.

Hamilton Beach Brands

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hamilton Beach Brands are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain fundamental drivers, Hamilton Beach sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kyocera ADR and Hamilton Beach

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

The idea behind Kyocera ADR and Hamilton Beach Brands 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.