Correlation Between ANGLER GAMING and Japan Tobacco
Can any of the company-specific risk be diversified away by investing in both ANGLER GAMING and Japan Tobacco 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 ANGLER GAMING and Japan Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANGLER GAMING PLC and Japan Tobacco, you can compare the effects of market volatilities on ANGLER GAMING and Japan Tobacco 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 ANGLER GAMING with a short position of Japan Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGLER GAMING and Japan Tobacco.
Diversification Opportunities for ANGLER GAMING and Japan Tobacco
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ANGLER and Japan is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding ANGLER GAMING PLC and Japan Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Tobacco and ANGLER GAMING 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 ANGLER GAMING PLC are associated (or correlated) with Japan Tobacco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Tobacco has no effect on the direction of ANGLER GAMING i.e., ANGLER GAMING and Japan Tobacco go up and down completely randomly.
Pair Corralation between ANGLER GAMING and Japan Tobacco
Assuming the 90 days horizon ANGLER GAMING PLC is expected to under-perform the Japan Tobacco. In addition to that, ANGLER GAMING is 3.25 times more volatile than Japan Tobacco. It trades about -0.11 of its total potential returns per unit of risk. Japan Tobacco is currently generating about 0.04 per unit of volatility. If you would invest 2,583 in Japan Tobacco on September 13, 2024 and sell it today you would earn a total of 24.00 from holding Japan Tobacco or generate 0.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANGLER GAMING PLC vs. Japan Tobacco
Performance |
| Timeline |
| ANGLER GAMING PLC |
| Japan Tobacco |
ANGLER GAMING and Japan Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANGLER GAMING and Japan Tobacco
The main advantage of trading using opposite ANGLER GAMING and Japan Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANGLER GAMING position performs unexpectedly, Japan Tobacco 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 Tobacco will offset losses from the drop in Japan Tobacco's long position.| ANGLER GAMING vs. Scientific Games | ANGLER GAMING vs. International Game Technology | ANGLER GAMING vs. Superior Plus Corp | ANGLER GAMING vs. SIVERS SEMICONDUCTORS AB |
| Japan Tobacco vs. Norwegian Air Shuttle | Japan Tobacco vs. Nok Airlines PCL | Japan Tobacco vs. Pentair plc | Japan Tobacco vs. Gol Intelligent Airlines |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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