Correlation Between Japan Post and INSURANCE AUST
Can any of the company-specific risk be diversified away by investing in both Japan Post and INSURANCE AUST 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 INSURANCE AUST 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 INSURANCE AUST GRP, you can compare the effects of market volatilities on Japan Post and INSURANCE AUST 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 INSURANCE AUST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Post and INSURANCE AUST.
Diversification Opportunities for Japan Post and INSURANCE AUST
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Japan and INSURANCE is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Japan Post Insurance and INSURANCE AUST GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INSURANCE AUST GRP 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 INSURANCE AUST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INSURANCE AUST GRP has no effect on the direction of Japan Post i.e., Japan Post and INSURANCE AUST go up and down completely randomly.
Pair Corralation between Japan Post and INSURANCE AUST
Assuming the 90 days trading horizon Japan Post Insurance is expected to generate 1.3 times more return on investment than INSURANCE AUST. However, Japan Post is 1.3 times more volatile than INSURANCE AUST GRP. It trades about 0.53 of its potential returns per unit of risk. INSURANCE AUST GRP is currently generating about 0.38 per unit of risk. If you would invest 1,500 in Japan Post Insurance on September 1, 2024 and sell it today you would earn a total of 460.00 from holding Japan Post Insurance or generate 30.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Post Insurance vs. INSURANCE AUST GRP
Performance |
| Timeline |
| Japan Post Insurance |
| INSURANCE AUST GRP |
Japan Post and INSURANCE AUST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Post and INSURANCE AUST
The main advantage of trading using opposite Japan Post and INSURANCE AUST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Post position performs unexpectedly, INSURANCE AUST 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 INSURANCE AUST will offset losses from the drop in INSURANCE AUST's long position.| Japan Post vs. Algonquin Power Utilities | Japan Post vs. Goodyear Tire Rubber | Japan Post vs. Caseys General Stores | Japan Post vs. Materialise NV |
| INSURANCE AUST vs. SIVERS SEMICONDUCTORS AB | INSURANCE AUST vs. Darden Restaurants | INSURANCE AUST vs. Reliance Steel Aluminum | INSURANCE AUST vs. Q2M Managementberatung AG |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |