Correlation Between China Resources and Japan Post
Can any of the company-specific risk be diversified away by investing in both China Resources 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 China Resources and Japan Post into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Resources Beer and Japan Post Insurance, you can compare the effects of market volatilities on China Resources 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 China Resources with a short position of Japan Post. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Resources and Japan Post.
Diversification Opportunities for China Resources and Japan Post
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and Japan is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding China Resources Beer 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 China Resources 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 China Resources Beer 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 China Resources i.e., China Resources and Japan Post go up and down completely randomly.
Pair Corralation between China Resources and Japan Post
Assuming the 90 days horizon China Resources is expected to generate 1.81 times less return on investment than Japan Post. In addition to that, China Resources is 2.66 times more volatile than Japan Post Insurance. It trades about 0.04 of its total potential returns per unit of risk. Japan Post Insurance is currently generating about 0.18 per unit of volatility. If you would invest 1,780 in Japan Post Insurance on November 5, 2024 and sell it today you would earn a total of 70.00 from holding Japan Post Insurance or generate 3.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Resources Beer vs. Japan Post Insurance
Performance |
| Timeline |
| China Resources Beer |
| Japan Post Insurance |
China Resources and Japan Post Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Resources and Japan Post
The main advantage of trading using opposite China Resources and Japan Post positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Resources 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.| China Resources vs. Columbia Sportswear | China Resources vs. EIDESVIK OFFSHORE NK | China Resources vs. Transport International Holdings | China Resources vs. Lendlease Group |
| Japan Post vs. Safety Insurance Group | Japan Post vs. G III Apparel Group | Japan Post vs. CarsalesCom | Japan Post vs. The Hanover Insurance |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |