Correlation Between ACI Worldwide and Kikkoman

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Can any of the company-specific risk be diversified away by investing in both ACI Worldwide and Kikkoman 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 ACI Worldwide and Kikkoman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ACI Worldwide and Kikkoman, you can compare the effects of market volatilities on ACI Worldwide and Kikkoman 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 ACI Worldwide with a short position of Kikkoman. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACI Worldwide and Kikkoman.

Diversification Opportunities for ACI Worldwide and Kikkoman

-0.07
  Correlation Coefficient

Good diversification

The 3 months correlation between ACI Worldwide and Kikkoman is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding ACI Worldwide and Kikkoman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kikkoman and ACI Worldwide 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 ACI Worldwide are associated (or correlated) with Kikkoman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kikkoman has no effect on the direction of ACI Worldwide i.e., ACI Worldwide and Kikkoman go up and down completely randomly.

Pair Corralation between ACI Worldwide and Kikkoman

If you would invest  5,649  in Kikkoman on September 8, 2022 and sell it today you would earn a total of  0.00  from holding Kikkoman or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

ACI Worldwide  vs.  Kikkoman

 Performance (%) 
       Timeline  
ACI Worldwide 
ACI Worldwide Performance
0 of 100
Over the last 90 days ACI Worldwide has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable forward indicators, ACI Worldwide is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

ACI Worldwide Price Channel

Kikkoman 
Kikkoman Performance
9 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Kikkoman are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Kikkoman is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Kikkoman Price Channel

ACI Worldwide and Kikkoman Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ACI Worldwide and Kikkoman

The main advantage of trading using opposite ACI Worldwide and Kikkoman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACI Worldwide position performs unexpectedly, Kikkoman 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 Kikkoman will offset losses from the drop in Kikkoman's long position.
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The idea behind ACI Worldwide and Kikkoman 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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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 Price Transformation module to use Price Transformation models to analyze depth of different equity instruments across global markets.

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