Correlation Between Japan Steel and Aya Gold
Can any of the company-specific risk be diversified away by investing in both Japan Steel and Aya Gold 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 Japan Steel and Aya Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Japan Steel and Aya Gold Silver, you can compare the effects of market volatilities on Japan Steel and Aya Gold 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 Japan Steel with a short position of Aya Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Steel and Aya Gold.
Diversification Opportunities for Japan Steel and Aya Gold
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Japan and Aya is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding The Japan Steel and Aya Gold Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aya Gold Silver and Japan Steel 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 The Japan Steel are associated (or correlated) with Aya Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aya Gold Silver has no effect on the direction of Japan Steel i.e., Japan Steel and Aya Gold go up and down completely randomly.
Pair Corralation between Japan Steel and Aya Gold
Assuming the 90 days horizon The Japan Steel is expected to generate 1.08 times more return on investment than Aya Gold. However, Japan Steel is 1.08 times more volatile than Aya Gold Silver. It trades about 0.09 of its potential returns per unit of risk. Aya Gold Silver is currently generating about -0.04 per unit of risk. If you would invest 2,540 in The Japan Steel on October 25, 2024 and sell it today you would earn a total of 1,100 from holding The Japan Steel or generate 43.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Japan Steel vs. Aya Gold Silver
Performance |
| Timeline |
| Japan Steel |
| Aya Gold Silver |
Japan Steel and Aya Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Steel and Aya Gold
The main advantage of trading using opposite Japan Steel and Aya Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Steel position performs unexpectedly, Aya Gold 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 Aya Gold will offset losses from the drop in Aya Gold's long position.| Japan Steel vs. Siemens Aktiengesellschaft | Japan Steel vs. Siemens Aktiengesellschaft | Japan Steel vs. Schneider Electric SE | Japan Steel vs. Atlas Copco A |
| Aya Gold vs. Semiconductor Manufacturing International | Aya Gold vs. Transport International Holdings | Aya Gold vs. TOREX SEMICONDUCTOR LTD | Aya Gold vs. Nippon Light Metal |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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