Correlation Between Cosan SA and Konoike Transport
Can any of the company-specific risk be diversified away by investing in both Cosan SA and Konoike Transport 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 Cosan SA and Konoike Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cosan SA ADR and Konoike Transport CoLtd, you can compare the effects of market volatilities on Cosan SA and Konoike Transport 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 Cosan SA with a short position of Konoike Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cosan SA and Konoike Transport.
Diversification Opportunities for Cosan SA and Konoike Transport
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cosan and Konoike is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Cosan SA ADR and Konoike Transport CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konoike Transport CoLtd and Cosan SA 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 Cosan SA ADR are associated (or correlated) with Konoike Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konoike Transport CoLtd has no effect on the direction of Cosan SA i.e., Cosan SA and Konoike Transport go up and down completely randomly.
Pair Corralation between Cosan SA and Konoike Transport
Given the investment horizon of 90 days Cosan SA is expected to generate 1.2 times less return on investment than Konoike Transport. In addition to that, Cosan SA is 10.7 times more volatile than Konoike Transport CoLtd. It trades about 0.01 of its total potential returns per unit of risk. Konoike Transport CoLtd is currently generating about 0.17 per unit of volatility. If you would invest 1,772 in Konoike Transport CoLtd on March 24, 2025 and sell it today you would earn a total of 64.00 from holding Konoike Transport CoLtd or generate 3.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.92% |
| Values | Daily Returns |
Cosan SA ADR vs. Konoike Transport CoLtd
Performance |
| Timeline |
| Cosan SA ADR |
| Konoike Transport CoLtd |
Cosan SA and Konoike Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cosan SA and Konoike Transport
The main advantage of trading using opposite Cosan SA and Konoike Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosan SA position performs unexpectedly, Konoike Transport 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 Konoike Transport will offset losses from the drop in Konoike Transport's long position.| Cosan SA vs. Delek Energy | Cosan SA vs. Crossamerica Partners LP | Cosan SA vs. Par Pacific Holdings | Cosan SA vs. Valvoline |
| Konoike Transport vs. National Beverage Corp | Konoike Transport vs. Ecolab Inc | Konoike Transport vs. Rogers | Konoike Transport vs. Diageo PLC ADR |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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