Correlation Between Japan Post and WIMFARM SA
Can any of the company-specific risk be diversified away by investing in both Japan Post and WIMFARM SA 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 WIMFARM SA 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 WIMFARM SA EO, you can compare the effects of market volatilities on Japan Post and WIMFARM SA 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 WIMFARM SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Post and WIMFARM SA.
Diversification Opportunities for Japan Post and WIMFARM SA
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Japan and WIMFARM is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Japan Post Insurance and WIMFARM SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIMFARM SA EO 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 WIMFARM SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIMFARM SA EO has no effect on the direction of Japan Post i.e., Japan Post and WIMFARM SA go up and down completely randomly.
Pair Corralation between Japan Post and WIMFARM SA
Assuming the 90 days trading horizon Japan Post Insurance is expected to under-perform the WIMFARM SA. But the stock apears to be less risky and, when comparing its historical volatility, Japan Post Insurance is 2.3 times less risky than WIMFARM SA. The stock trades about -0.15 of its potential returns per unit of risk. The WIMFARM SA EO is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 323.00 in WIMFARM SA EO on September 19, 2024 and sell it today you would earn a total of 19.00 from holding WIMFARM SA EO or generate 5.88% 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. WIMFARM SA EO
Performance |
| Timeline |
| Japan Post Insurance |
| WIMFARM SA EO |
Japan Post and WIMFARM SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Post and WIMFARM SA
The main advantage of trading using opposite Japan Post and WIMFARM SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Post position performs unexpectedly, WIMFARM SA 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 WIMFARM SA will offset losses from the drop in WIMFARM SA's long position.The idea behind Japan Post Insurance and WIMFARM SA EO 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.| WIMFARM SA vs. AB Volvo | WIMFARM SA vs. Daimler Truck Holding | WIMFARM SA vs. Superior Plus Corp | WIMFARM SA vs. SIVERS SEMICONDUCTORS AB |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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