Correlation Between EVN AG and JAPAN TOBACCO
Can any of the company-specific risk be diversified away by investing in both EVN AG 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 EVN AG and JAPAN TOBACCO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EVN AG and JAPAN TOBACCO UNSPADR12, you can compare the effects of market volatilities on EVN AG 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 EVN AG with a short position of JAPAN TOBACCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of EVN AG and JAPAN TOBACCO.
Diversification Opportunities for EVN AG and JAPAN TOBACCO
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between EVN and JAPAN is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding EVN AG and JAPAN TOBACCO UNSPADR12 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAPAN TOBACCO UNSPADR12 and EVN AG 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 EVN AG 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 UNSPADR12 has no effect on the direction of EVN AG i.e., EVN AG and JAPAN TOBACCO go up and down completely randomly.
Pair Corralation between EVN AG and JAPAN TOBACCO
Assuming the 90 days horizon EVN AG is expected to under-perform the JAPAN TOBACCO. But the stock apears to be less risky and, when comparing its historical volatility, EVN AG is 1.06 times less risky than JAPAN TOBACCO. The stock trades about -0.1 of its potential returns per unit of risk. The JAPAN TOBACCO UNSPADR12 is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,240 in JAPAN TOBACCO UNSPADR12 on September 13, 2024 and sell it today you would earn a total of 20.00 from holding JAPAN TOBACCO UNSPADR12 or generate 1.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EVN AG vs. JAPAN TOBACCO UNSPADR12
Performance |
| Timeline |
| EVN AG |
| JAPAN TOBACCO UNSPADR12 |
EVN AG and JAPAN TOBACCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EVN AG and JAPAN TOBACCO
The main advantage of trading using opposite EVN AG and JAPAN TOBACCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EVN AG 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.| EVN AG vs. Western Copper and | EVN AG vs. BRIT AMER TOBACCO | EVN AG vs. MCEWEN MINING INC | EVN AG vs. Perseus Mining Limited |
| JAPAN TOBACCO vs. MCEWEN MINING INC | JAPAN TOBACCO vs. GALENA MINING LTD | JAPAN TOBACCO vs. GRIFFIN MINING LTD | JAPAN TOBACCO vs. Calibre Mining Corp |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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