Correlation Between St James’s and JAPAN AIRLINES
Can any of the company-specific risk be diversified away by investing in both St James’s 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 St James’s and JAPAN AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between St Jamess Place and JAPAN AIRLINES, you can compare the effects of market volatilities on St James’s 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 St James’s with a short position of JAPAN AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of St James’s and JAPAN AIRLINES.
Diversification Opportunities for St James’s and JAPAN AIRLINES
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 1IV and JAPAN is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding St Jamess Place and JAPAN AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAPAN AIRLINES and St James’s 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 St Jamess Place 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 St James’s i.e., St James’s and JAPAN AIRLINES go up and down completely randomly.
Pair Corralation between St James’s and JAPAN AIRLINES
Assuming the 90 days horizon St Jamess Place is expected to generate 2.18 times more return on investment than JAPAN AIRLINES. However, St James’s is 2.18 times more volatile than JAPAN AIRLINES. It trades about 0.13 of its potential returns per unit of risk. JAPAN AIRLINES is currently generating about 0.16 per unit of risk. If you would invest 1,051 in St Jamess Place on November 3, 2024 and sell it today you would earn a total of 65.00 from holding St Jamess Place or generate 6.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
St Jamess Place vs. JAPAN AIRLINES
Performance |
| Timeline |
| St Jamess Place |
| JAPAN AIRLINES |
St James’s and JAPAN AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with St James’s and JAPAN AIRLINES
The main advantage of trading using opposite St James’s and JAPAN AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if St James’s 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.| St James’s vs. Corporate Office Properties | St James’s vs. HAVERTY FURNITURE A | St James’s vs. SCANSOURCE | St James’s vs. Siamgas And Petrochemicals |
| JAPAN AIRLINES vs. MELIA HOTELS | JAPAN AIRLINES vs. MARKET VECTR RETAIL | JAPAN AIRLINES vs. DALATA HOTEL | JAPAN AIRLINES vs. TRADEGATE |
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 CEOs Directory module to screen CEOs from public companies around the world.
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