Correlation Between Japan Steel and Globex Mining
Can any of the company-specific risk be diversified away by investing in both Japan Steel and Globex Mining 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 Globex Mining 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 Globex Mining Enterprises, you can compare the effects of market volatilities on Japan Steel and Globex Mining 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 Globex Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Steel and Globex Mining.
Diversification Opportunities for Japan Steel and Globex Mining
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Japan and Globex is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding The Japan Steel and Globex Mining Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globex Mining Enterprises 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 Globex Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globex Mining Enterprises has no effect on the direction of Japan Steel i.e., Japan Steel and Globex Mining go up and down completely randomly.
Pair Corralation between Japan Steel and Globex Mining
Assuming the 90 days horizon The Japan Steel is expected to under-perform the Globex Mining. In addition to that, Japan Steel is 1.24 times more volatile than Globex Mining Enterprises. It trades about -0.04 of its total potential returns per unit of risk. Globex Mining Enterprises is currently generating about 0.45 per unit of volatility. If you would invest 79.00 in Globex Mining Enterprises on November 7, 2024 and sell it today you would earn a total of 23.00 from holding Globex Mining Enterprises or generate 29.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Japan Steel vs. Globex Mining Enterprises
Performance |
| Timeline |
| Japan Steel |
| Globex Mining Enterprises |
Japan Steel and Globex Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Steel and Globex Mining
The main advantage of trading using opposite Japan Steel and Globex Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Steel position performs unexpectedly, Globex Mining 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 Globex Mining will offset losses from the drop in Globex Mining's long position.| Japan Steel vs. AEON STORES | Japan Steel vs. CHAMPION IRON | Japan Steel vs. JIAHUA STORES | Japan Steel vs. BJs Wholesale Club |
| Globex Mining vs. China Datang | Globex Mining vs. Pure Storage | Globex Mining vs. EMBARK EDUCATION LTD | Globex Mining vs. DATANG INTL POW |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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