Correlation Between JIAHUA STORES and Japan Tobacco
Can any of the company-specific risk be diversified away by investing in both JIAHUA STORES and Japan Tobacco 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 JIAHUA STORES and Japan Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JIAHUA STORES and Japan Tobacco, you can compare the effects of market volatilities on JIAHUA STORES and Japan Tobacco 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 JIAHUA STORES with a short position of Japan Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of JIAHUA STORES and Japan Tobacco.
Diversification Opportunities for JIAHUA STORES and Japan Tobacco
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between JIAHUA and Japan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding JIAHUA STORES and Japan Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Tobacco and JIAHUA STORES 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 JIAHUA STORES are associated (or correlated) with Japan Tobacco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Tobacco has no effect on the direction of JIAHUA STORES i.e., JIAHUA STORES and Japan Tobacco go up and down completely randomly.
Pair Corralation between JIAHUA STORES and Japan Tobacco
If you would invest 2,531 in Japan Tobacco on September 21, 2024 and sell it today you would earn a total of 26.00 from holding Japan Tobacco or generate 1.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JIAHUA STORES vs. Japan Tobacco
Performance |
| Timeline |
| JIAHUA STORES |
| Japan Tobacco |
JIAHUA STORES and Japan Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JIAHUA STORES and Japan Tobacco
The main advantage of trading using opposite JIAHUA STORES and Japan Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JIAHUA STORES position performs unexpectedly, Japan Tobacco 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 Tobacco will offset losses from the drop in Japan Tobacco's long position.The idea behind JIAHUA STORES and Japan Tobacco pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Japan Tobacco vs. BJs Wholesale Club | Japan Tobacco vs. QURATE RETAIL INC | Japan Tobacco vs. JIAHUA STORES | Japan Tobacco vs. AEON STORES |
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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