Correlation Between Commercial International and Japan Post
Can any of the company-specific risk be diversified away by investing in both Commercial International 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 Commercial International and Japan Post into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commercial International Bank and Japan Post Holdings, you can compare the effects of market volatilities on Commercial International 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 Commercial International with a short position of Japan Post. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commercial International and Japan Post.
Diversification Opportunities for Commercial International and Japan Post
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Commercial and Japan is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Commercial International Bank and Japan Post Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Post Holdings and Commercial International 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 Commercial International Bank 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 Holdings has no effect on the direction of Commercial International i.e., Commercial International and Japan Post go up and down completely randomly.
Pair Corralation between Commercial International and Japan Post
Assuming the 90 days horizon Commercial International Bank is expected to generate 0.61 times more return on investment than Japan Post. However, Commercial International Bank is 1.63 times less risky than Japan Post. It trades about 0.03 of its potential returns per unit of risk. Japan Post Holdings is currently generating about -0.01 per unit of risk. If you would invest 151.00 in Commercial International Bank on September 3, 2024 and sell it today you would earn a total of 1.00 from holding Commercial International Bank or generate 0.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commercial International Bank vs. Japan Post Holdings
Performance |
| Timeline |
| Commercial International |
| Japan Post Holdings |
Commercial International and Japan Post Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commercial International and Japan Post
The main advantage of trading using opposite Commercial International and Japan Post positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commercial International 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.| Commercial International vs. First Hawaiian | Commercial International vs. Central Pacific Financial | Commercial International vs. Territorial Bancorp | Commercial International vs. Comerica |
| Japan Post vs. Nmb Financial Corp | Japan Post vs. Bank Utica Ny | Japan Post vs. Auburn Bancorp | Japan Post vs. Permanent TSB Group |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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