Correlation Between HEXAGON AB and Japan Post
Can any of the company-specific risk be diversified away by investing in both HEXAGON AB 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 HEXAGON AB and Japan Post into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HEXAGON AB ADR1 and Japan Post Insurance, you can compare the effects of market volatilities on HEXAGON AB 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 HEXAGON AB with a short position of Japan Post. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEXAGON AB and Japan Post.
Diversification Opportunities for HEXAGON AB and Japan Post
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HEXAGON and Japan is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding HEXAGON AB ADR1 and Japan Post Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Post Insurance and HEXAGON AB 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 HEXAGON AB ADR1 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 Insurance has no effect on the direction of HEXAGON AB i.e., HEXAGON AB and Japan Post go up and down completely randomly.
Pair Corralation between HEXAGON AB and Japan Post
Assuming the 90 days trading horizon HEXAGON AB ADR1 is expected to under-perform the Japan Post. But the stock apears to be less risky and, when comparing its historical volatility, HEXAGON AB ADR1 is 1.01 times less risky than Japan Post. The stock trades about -0.04 of its potential returns per unit of risk. The Japan Post Insurance is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,690 in Japan Post Insurance on September 4, 2024 and sell it today you would earn a total of 310.00 from holding Japan Post Insurance or generate 18.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
HEXAGON AB ADR1 vs. Japan Post Insurance
Performance |
| Timeline |
| HEXAGON AB ADR1 |
| Japan Post Insurance |
HEXAGON AB and Japan Post Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HEXAGON AB and Japan Post
The main advantage of trading using opposite HEXAGON AB and Japan Post positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEXAGON AB 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.| HEXAGON AB vs. Teledyne Technologies Incorporated | HEXAGON AB vs. Trimble | HEXAGON AB vs. MKS Instruments |
| Japan Post vs. Harmony Gold Mining | Japan Post vs. LION ONE METALS | Japan Post vs. QBE Insurance Group | Japan Post vs. GREENX METALS LTD |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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