Correlation Between Kansai Paint and Linde Plc

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

By analyzing existing cross correlation between Kansai Paint Co and Linde plc, you can compare the effects of market volatilities on Kansai Paint and Linde Plc 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 Kansai Paint with a short position of Linde Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kansai Paint and Linde Plc.

Diversification Opportunities for Kansai Paint and Linde Plc

-0.04

Correlation Coefficient

Kansai Paint  Linde Plc

Good diversification

The 3 months correlation between Kansai and Linde is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Kansai Paint Co and Linde plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linde plc and Kansai Paint 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 Kansai Paint Co are associated (or correlated) with Linde Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linde plc has no effect on the direction of Kansai Paint i.e., Kansai Paint and Linde Plc go up and down completely randomly.

Pair Corralation between Kansai Paint and Linde Plc

Assuming the 90 days horizon Kansai Paint Co is expected to under-perform the Linde Plc. In addition to that, Kansai Paint is 77.68 times more volatile than Linde plc. It trades about -0.27 of its total potential returns per unit of risk. Linde plc is currently generating about -0.15 per unit of volatility. If you would invest  40,500  in Linde plc on July 24, 2025 and sell it today you would lose (1,620) from holding Linde plc or give up 4.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

Kansai Paint Co  vs.  Linde plc

Kansai Paint

Risk-Adjusted Performance

Weakest

Over the last 90 days Kansai Paint Co 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 basic indicators remain nearly stable which may send shares a bit higher in November 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Linde plc

Risk-Adjusted Performance

Weakest

Over the last 90 days Linde plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Linde Plc is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Kansai Paint and Linde Plc

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

The idea behind Kansai Paint Co and Linde plc 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.