Correlation Between First Ship and Japan Tobacco
Can any of the company-specific risk be diversified away by investing in both First Ship 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 First Ship and Japan Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Ship Lease and Japan Tobacco ADR, you can compare the effects of market volatilities on First Ship 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 First Ship with a short position of Japan Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Ship and Japan Tobacco.
Diversification Opportunities for First Ship and Japan Tobacco
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Japan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Ship Lease and Japan Tobacco ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Tobacco ADR and First Ship 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 First Ship Lease 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 ADR has no effect on the direction of First Ship i.e., First Ship and Japan Tobacco go up and down completely randomly.
Pair Corralation between First Ship and Japan Tobacco
If you would invest 4.00 in First Ship Lease on September 2, 2024 and sell it today you would earn a total of 0.00 from holding First Ship Lease or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
First Ship Lease vs. Japan Tobacco ADR
Performance |
| Timeline |
| First Ship Lease |
| Japan Tobacco ADR |
First Ship and Japan Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Ship and Japan Tobacco
The main advantage of trading using opposite First Ship and Japan Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Ship 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.| First Ship vs. Monster Beverage Corp | First Ship vs. SNDL Inc | First Ship vs. Hudson Pacific Properties | First Ship vs. Mativ Holdings |
| Japan Tobacco vs. British American Tobacco | Japan Tobacco vs. Imperial Brands PLC | Japan Tobacco vs. RLX Technology | Japan Tobacco vs. British American Tobacco |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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