Correlation Between PLATO GOLD and Japan Post
Can any of the company-specific risk be diversified away by investing in both PLATO GOLD and Japan Post 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 PLATO GOLD and Japan Post into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLATO GOLD P and Japan Post Insurance, you can compare the effects of market volatilities on PLATO GOLD and Japan Post 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 PLATO GOLD with a short position of Japan Post. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLATO GOLD and Japan Post.
Diversification Opportunities for PLATO GOLD and Japan Post
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between PLATO and Japan is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding PLATO GOLD P and Japan Post Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Post Insurance and PLATO GOLD 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 PLATO GOLD P are associated (or correlated) with Japan Post. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Post Insurance has no effect on the direction of PLATO GOLD i.e., PLATO GOLD and Japan Post go up and down completely randomly.
Pair Corralation between PLATO GOLD and Japan Post
Assuming the 90 days horizon PLATO GOLD P is expected to generate 23.98 times more return on investment than Japan Post. However, PLATO GOLD is 23.98 times more volatile than Japan Post Insurance. It trades about 0.09 of its potential returns per unit of risk. Japan Post Insurance is currently generating about 0.04 per unit of risk. If you would invest 1.40 in PLATO GOLD P on September 4, 2024 and sell it today you would lose (1.00) from holding PLATO GOLD P or give up 71.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PLATO GOLD P vs. Japan Post Insurance
Performance |
| Timeline |
| PLATO GOLD P |
| Japan Post Insurance |
PLATO GOLD and Japan Post Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLATO GOLD and Japan Post
The main advantage of trading using opposite PLATO GOLD and Japan Post positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLATO GOLD position performs unexpectedly, Japan Post 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 Japan Post will offset losses from the drop in Japan Post's long position.| PLATO GOLD vs. ZIJIN MINH UNSPADR20 | PLATO GOLD vs. Barrick Gold | PLATO GOLD vs. Superior Plus Corp | PLATO GOLD vs. NMI Holdings |
| Japan Post vs. Harmony Gold Mining | Japan Post vs. LION ONE METALS | Japan Post vs. QBE Insurance Group | Japan Post vs. GREENX METALS LTD |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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