Correlation Between Kubota Corp and Cummins
Can any of the company-specific risk be diversified away by investing in both Kubota Corp and Cummins 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 Kubota Corp and Cummins into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kubota Corp ADR and Cummins, you can compare the effects of market volatilities on Kubota Corp and Cummins 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 Kubota Corp with a short position of Cummins. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kubota Corp and Cummins.
Diversification Opportunities for Kubota Corp and Cummins
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kubota and Cummins is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Kubota Corp ADR and Cummins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cummins and Kubota 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 Kubota Corp ADR are associated (or correlated) with Cummins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cummins has no effect on the direction of Kubota Corp i.e., Kubota Corp and Cummins go up and down completely randomly.
Pair Corralation between Kubota Corp and Cummins
If you would invest 26,397 in Cummins on January 24, 2024 and sell it today you would earn a total of 2,643 from holding Cummins or generate 10.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 2.33% |
| Values | Daily Returns |
Kubota Corp ADR vs. Cummins
Performance |
| Timeline |
| Kubota Corp ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Cummins |
Kubota Corp and Cummins Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kubota Corp and Cummins
The main advantage of trading using opposite Kubota Corp and Cummins positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kubota Corp position performs unexpectedly, Cummins 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 Cummins will offset losses from the drop in Cummins' long position.| Kubota Corp vs. Hitachi Construction Machinery | Kubota Corp vs. Terex | Kubota Corp vs. Komatsu | Kubota Corp vs. Astec Industries |
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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