Correlation Between Japan Post and Alibaba Health
Can any of the company-specific risk be diversified away by investing in both Japan Post and Alibaba Health 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 Alibaba Health 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 Alibaba Health Information, you can compare the effects of market volatilities on Japan Post and Alibaba Health 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 Alibaba Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Post and Alibaba Health.
Diversification Opportunities for Japan Post and Alibaba Health
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Japan and Alibaba is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Japan Post Insurance and Alibaba Health Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alibaba Health Infor 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 Alibaba Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alibaba Health Infor has no effect on the direction of Japan Post i.e., Japan Post and Alibaba Health go up and down completely randomly.
Pair Corralation between Japan Post and Alibaba Health
Assuming the 90 days trading horizon Japan Post is expected to generate 2.34 times less return on investment than Alibaba Health. But when comparing it to its historical volatility, Japan Post Insurance is 3.04 times less risky than Alibaba Health. It trades about 0.21 of its potential returns per unit of risk. Alibaba Health Information is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 40.00 in Alibaba Health Information on November 5, 2024 and sell it today you would earn a total of 4.00 from holding Alibaba Health Information or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Post Insurance vs. Alibaba Health Information
Performance |
| Timeline |
| Japan Post Insurance |
| Alibaba Health Infor |
Japan Post and Alibaba Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Post and Alibaba Health
The main advantage of trading using opposite Japan Post and Alibaba Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Post position performs unexpectedly, Alibaba Health 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 Alibaba Health will offset losses from the drop in Alibaba Health's long position.| Japan Post vs. Osisko Metals | Japan Post vs. Yuexiu Transport Infrastructure | Japan Post vs. CLOVER HEALTH INV | Japan Post vs. MPH Health Care |
| Alibaba Health vs. Moneysupermarket Group PLC | Alibaba Health vs. 24SEVENOFFICE GROUP AB | Alibaba Health vs. Corporate Office Properties | Alibaba Health vs. Fevertree Drinks PLC |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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