Correlation Between JAPAN AIRLINES and Global Ship
Can any of the company-specific risk be diversified away by investing in both JAPAN AIRLINES and Global Ship 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 AIRLINES and Global Ship into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JAPAN AIRLINES and Global Ship Lease, you can compare the effects of market volatilities on JAPAN AIRLINES and Global Ship 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 AIRLINES with a short position of Global Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of JAPAN AIRLINES and Global Ship.
Diversification Opportunities for JAPAN AIRLINES and Global Ship
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JAPAN and Global is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding JAPAN AIRLINES and Global Ship Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Ship Lease and JAPAN AIRLINES 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 JAPAN AIRLINES are associated (or correlated) with Global Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Ship Lease has no effect on the direction of JAPAN AIRLINES i.e., JAPAN AIRLINES and Global Ship go up and down completely randomly.
Pair Corralation between JAPAN AIRLINES and Global Ship
Assuming the 90 days trading horizon JAPAN AIRLINES is expected to under-perform the Global Ship. But the stock apears to be less risky and, when comparing its historical volatility, JAPAN AIRLINES is 2.31 times less risky than Global Ship. The stock trades about -0.41 of its potential returns per unit of risk. The Global Ship Lease is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,080 in Global Ship Lease on October 11, 2024 and sell it today you would earn a total of 44.00 from holding Global Ship Lease or generate 2.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JAPAN AIRLINES vs. Global Ship Lease
Performance |
| Timeline |
| JAPAN AIRLINES |
| Global Ship Lease |
JAPAN AIRLINES and Global Ship Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JAPAN AIRLINES and Global Ship
The main advantage of trading using opposite JAPAN AIRLINES and Global Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JAPAN AIRLINES position performs unexpectedly, Global Ship 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 Global Ship will offset losses from the drop in Global Ship's long position.| JAPAN AIRLINES vs. National Beverage Corp | JAPAN AIRLINES vs. INDOFOOD AGRI RES | JAPAN AIRLINES vs. GRIFFIN MINING LTD | JAPAN AIRLINES vs. VIVA WINE GROUP |
| Global Ship vs. CEOTRONICS | Global Ship vs. Coor Service Management | Global Ship vs. Pure Storage | Global Ship vs. LANDSEA GREEN MANAGEMENT |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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