Correlation Between Japan Post and GREENX METALS
Can any of the company-specific risk be diversified away by investing in both Japan Post and GREENX METALS 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 Japan Post and GREENX METALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Post Insurance and GREENX METALS LTD, you can compare the effects of market volatilities on Japan Post and GREENX METALS 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 Japan Post with a short position of GREENX METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Post and GREENX METALS.
Diversification Opportunities for Japan Post and GREENX METALS
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Japan and GREENX is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Japan Post Insurance and GREENX METALS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GREENX METALS LTD and Japan Post 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 Japan Post Insurance are associated (or correlated) with GREENX METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GREENX METALS LTD has no effect on the direction of Japan Post i.e., Japan Post and GREENX METALS go up and down completely randomly.
Pair Corralation between Japan Post and GREENX METALS
Assuming the 90 days trading horizon Japan Post Insurance is expected to generate 0.45 times more return on investment than GREENX METALS. However, Japan Post Insurance is 2.22 times less risky than GREENX METALS. It trades about 0.15 of its potential returns per unit of risk. GREENX METALS LTD is currently generating about 0.02 per unit of risk. If you would invest 1,620 in Japan Post Insurance on August 25, 2024 and sell it today you would earn a total of 240.00 from holding Japan Post Insurance or generate 14.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Post Insurance vs. GREENX METALS LTD
Performance |
| Timeline |
| Japan Post Insurance |
| GREENX METALS LTD |
Japan Post and GREENX METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Post and GREENX METALS
The main advantage of trading using opposite Japan Post and GREENX METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Post position performs unexpectedly, GREENX METALS 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 GREENX METALS will offset losses from the drop in GREENX METALS's long position.The idea behind Japan Post Insurance and GREENX METALS 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.| GREENX METALS vs. PERENNIAL ENERGY HD 01 | GREENX METALS vs. Superior Plus Corp | GREENX METALS vs. NMI Holdings | GREENX METALS vs. Origin Agritech |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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