Correlation Between Twitter and Kurita Water

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

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

Diversification Opportunities for Twitter and Kurita Water

0.32

Correlation Coefficient

Twitter  Kurita Water

Weak diversification

The 3 months correlation between Twitter and Kurita is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Twitter and Kurita Water Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kurita Water Industries and Twitter 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 Twitter are associated (or correlated) with Kurita Water. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kurita Water Industries has no effect on the direction of Twitter i.e., Twitter and Kurita Water go up and down completely randomly.

Pair Corralation between Twitter and Kurita Water

If you would invest  3,626  in Kurita Water Industries on January 19, 2024 and sell it today you would earn a total of  269.00  from holding Kurita Water Industries or generate 7.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.61%
Values	Daily Returns

Twitter  vs.  Kurita Water Industries

Twitter

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Twitter has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Twitter is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Kurita Water Industries

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kurita Water Industries are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, Kurita Water may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Twitter and Kurita Water

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

The idea behind Twitter and Kurita Water Industries 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.