Correlation Between Strategic Investments and JAPAN AIRLINES
Can any of the company-specific risk be diversified away by investing in both Strategic Investments and JAPAN AIRLINES 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 Strategic Investments and JAPAN AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Investments AS and JAPAN AIRLINES, you can compare the effects of market volatilities on Strategic Investments and JAPAN AIRLINES 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 Strategic Investments with a short position of JAPAN AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Investments and JAPAN AIRLINES.
Diversification Opportunities for Strategic Investments and JAPAN AIRLINES
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Strategic and JAPAN is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Investments AS and JAPAN AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAPAN AIRLINES and Strategic Investments 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 Strategic Investments AS are associated (or correlated) with JAPAN AIRLINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JAPAN AIRLINES has no effect on the direction of Strategic Investments i.e., Strategic Investments and JAPAN AIRLINES go up and down completely randomly.
Pair Corralation between Strategic Investments and JAPAN AIRLINES
Assuming the 90 days horizon Strategic Investments AS is expected to generate 5.04 times more return on investment than JAPAN AIRLINES. However, Strategic Investments is 5.04 times more volatile than JAPAN AIRLINES. It trades about 0.08 of its potential returns per unit of risk. JAPAN AIRLINES is currently generating about 0.08 per unit of risk. If you would invest 13.00 in Strategic Investments AS on August 28, 2024 and sell it today you would earn a total of 1.00 from holding Strategic Investments AS or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Strategic Investments AS vs. JAPAN AIRLINES
Performance |
| Timeline |
| Strategic Investments |
| JAPAN AIRLINES |
Strategic Investments and JAPAN AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Investments and JAPAN AIRLINES
The main advantage of trading using opposite Strategic Investments and JAPAN AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Investments position performs unexpectedly, JAPAN AIRLINES 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 AIRLINES will offset losses from the drop in JAPAN AIRLINES's long position.| Strategic Investments vs. The Bank of | Strategic Investments vs. Superior Plus Corp | Strategic Investments vs. NMI Holdings | Strategic Investments vs. Origin Agritech |
| JAPAN AIRLINES vs. Hyrican Informationssysteme Aktiengesellschaft | JAPAN AIRLINES vs. Sunny Optical Technology | JAPAN AIRLINES vs. INFORMATION SVC GRP | JAPAN AIRLINES vs. NetSol Technologies |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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