Correlation Between USWE SPORTS and Japan Post
Can any of the company-specific risk be diversified away by investing in both USWE SPORTS 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 USWE SPORTS and Japan Post into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between USWE SPORTS AB and Japan Post Insurance, you can compare the effects of market volatilities on USWE SPORTS 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 USWE SPORTS with a short position of Japan Post. Check out your portfolio center. Please also check ongoing floating volatility patterns of USWE SPORTS and Japan Post.
Diversification Opportunities for USWE SPORTS and Japan Post
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between USWE and Japan is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding USWE SPORTS AB 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 USWE SPORTS 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 USWE SPORTS AB 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 USWE SPORTS i.e., USWE SPORTS and Japan Post go up and down completely randomly.
Pair Corralation between USWE SPORTS and Japan Post
Assuming the 90 days horizon USWE SPORTS AB is expected to under-perform the Japan Post. In addition to that, USWE SPORTS is 1.71 times more volatile than Japan Post Insurance. It trades about -0.07 of its total potential returns per unit of risk. Japan Post Insurance is currently generating about 0.04 per unit of volatility. If you would invest 1,690 in Japan Post Insurance on September 4, 2024 and sell it today you would earn a total of 310.00 from holding Japan Post Insurance or generate 18.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
USWE SPORTS AB vs. Japan Post Insurance
Performance |
| Timeline |
| USWE SPORTS AB |
| Japan Post Insurance |
USWE SPORTS and Japan Post Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USWE SPORTS and Japan Post
The main advantage of trading using opposite USWE SPORTS and Japan Post positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE SPORTS 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.| USWE SPORTS vs. SCANSOURCE | USWE SPORTS vs. Uber Technologies | USWE SPORTS vs. GALENA MINING LTD | USWE SPORTS vs. Playtech plc |
| 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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