Correlation Between Japan Post and Altria
Can any of the company-specific risk be diversified away by investing in both Japan Post and Altria 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 Altria 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 Altria Group, you can compare the effects of market volatilities on Japan Post and Altria 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 Altria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Post and Altria.
Diversification Opportunities for Japan Post and Altria
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Japan and Altria is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Japan Post Insurance and Altria Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altria Group 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 Altria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altria Group has no effect on the direction of Japan Post i.e., Japan Post and Altria go up and down completely randomly.
Pair Corralation between Japan Post and Altria
Assuming the 90 days trading horizon Japan Post Insurance is expected to generate 0.88 times more return on investment than Altria. However, Japan Post Insurance is 1.13 times less risky than Altria. It trades about 0.17 of its potential returns per unit of risk. Altria Group is currently generating about -0.15 per unit of risk. If you would invest 1,800 in Japan Post Insurance on November 2, 2024 and sell it today you would earn a total of 70.00 from holding Japan Post Insurance or generate 3.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Japan Post Insurance vs. Altria Group
Performance |
| Timeline |
| Japan Post Insurance |
| Altria Group |
Japan Post and Altria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Post and Altria
The main advantage of trading using opposite Japan Post and Altria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Post position performs unexpectedly, Altria 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 Altria will offset losses from the drop in Altria's long position.| Japan Post vs. Live Nation Entertainment | Japan Post vs. Fuji Media Holdings | Japan Post vs. Seven West Media | Japan Post vs. Gaztransport Technigaz SA |
| Altria vs. Philip Morris International | Altria vs. Philip Morris International | Altria vs. British American Tobacco | Altria vs. British American Tobacco |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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