Correlation Between Rogers Communications and KOBE STEEL

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

By analyzing existing cross correlation between Rogers Communications and KOBE STEEL LTD, you can compare the effects of market volatilities on Rogers Communications and KOBE STEEL 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 Rogers Communications with a short position of KOBE STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rogers Communications and KOBE STEEL.

Diversification Opportunities for Rogers Communications and KOBE STEEL

-0.72

Correlation Coefficient

Rogers Communications  KOBE STEEL

Pay attention - limited upside

The 3 months correlation between Rogers and KOBE is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Rogers Communications and KOBE STEEL LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KOBE STEEL LTD and Rogers Communications 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 Rogers Communications are associated (or correlated) with KOBE STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KOBE STEEL LTD has no effect on the direction of Rogers Communications i.e., Rogers Communications and KOBE STEEL go up and down completely randomly.

Pair Corralation between Rogers Communications and KOBE STEEL

Assuming the 90 days trading horizon Rogers Communications is expected to generate 1.01 times more return on investment than KOBE STEEL. However, Rogers Communications is 1.01 times more volatile than KOBE STEEL LTD. It trades about 0.3 of its potential returns per unit of risk. KOBE STEEL LTD is currently generating about -0.03 per unit of risk. If you would invest  2,190  in Rogers Communications on April 25, 2025 and sell it today you would earn a total of  650.00  from holding Rogers Communications or generate 29.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Rogers Communications  vs.  KOBE STEEL LTD

Rogers Communications

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Rogers Communications are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, Rogers Communications reported solid returns over the last few months and may actually be approaching a breakup point.

KOBE STEEL LTD

Risk-Adjusted Performance

Very Weak

Over the last 90 days KOBE STEEL LTD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, KOBE STEEL is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Rogers Communications and KOBE STEEL

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

The idea behind Rogers Communications and KOBE STEEL LTD 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.