Correlation Between AFFLUENT MEDICAL and JAPAN AIRLINES
Can any of the company-specific risk be diversified away by investing in both AFFLUENT MEDICAL and JAPAN AIRLINES 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 AFFLUENT MEDICAL and JAPAN AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AFFLUENT MEDICAL SAS and JAPAN AIRLINES, you can compare the effects of market volatilities on AFFLUENT MEDICAL and JAPAN AIRLINES 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 AFFLUENT MEDICAL with a short position of JAPAN AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of AFFLUENT MEDICAL and JAPAN AIRLINES.
Diversification Opportunities for AFFLUENT MEDICAL and JAPAN AIRLINES
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AFFLUENT and JAPAN is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding AFFLUENT MEDICAL SAS and JAPAN AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAPAN AIRLINES and AFFLUENT MEDICAL 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 AFFLUENT MEDICAL SAS are associated (or correlated) with JAPAN AIRLINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JAPAN AIRLINES has no effect on the direction of AFFLUENT MEDICAL i.e., AFFLUENT MEDICAL and JAPAN AIRLINES go up and down completely randomly.
Pair Corralation between AFFLUENT MEDICAL and JAPAN AIRLINES
Assuming the 90 days horizon AFFLUENT MEDICAL SAS is expected to under-perform the JAPAN AIRLINES. In addition to that, AFFLUENT MEDICAL is 3.11 times more volatile than JAPAN AIRLINES. It trades about -0.03 of its total potential returns per unit of risk. JAPAN AIRLINES is currently generating about 0.18 per unit of volatility. If you would invest 1,520 in JAPAN AIRLINES on November 6, 2024 and sell it today you would earn a total of 60.00 from holding JAPAN AIRLINES or generate 3.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AFFLUENT MEDICAL SAS vs. JAPAN AIRLINES
Performance |
| Timeline |
| AFFLUENT MEDICAL SAS |
| JAPAN AIRLINES |
AFFLUENT MEDICAL and JAPAN AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AFFLUENT MEDICAL and JAPAN AIRLINES
The main advantage of trading using opposite AFFLUENT MEDICAL and JAPAN AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AFFLUENT MEDICAL position performs unexpectedly, JAPAN AIRLINES 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 JAPAN AIRLINES will offset losses from the drop in JAPAN AIRLINES's long position.| AFFLUENT MEDICAL vs. Yuexiu Transport Infrastructure | AFFLUENT MEDICAL vs. Fukuyama Transporting Co | AFFLUENT MEDICAL vs. Air Transport Services | AFFLUENT MEDICAL vs. SOEDER SPORTFISKE AB |
| JAPAN AIRLINES vs. East Africa Metals | JAPAN AIRLINES vs. Japan Medical Dynamic | JAPAN AIRLINES vs. GALENA MINING LTD | JAPAN AIRLINES vs. Merit Medical Systems |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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