Correlation Between JAPAN AIRLINES and Gaztransport Technigaz
Can any of the company-specific risk be diversified away by investing in both JAPAN AIRLINES and Gaztransport Technigaz 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 Gaztransport Technigaz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JAPAN AIRLINES and Gaztransport Technigaz SA, you can compare the effects of market volatilities on JAPAN AIRLINES and Gaztransport Technigaz 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 Gaztransport Technigaz. Check out your portfolio center. Please also check ongoing floating volatility patterns of JAPAN AIRLINES and Gaztransport Technigaz.
Diversification Opportunities for JAPAN AIRLINES and Gaztransport Technigaz
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JAPAN and Gaztransport is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding JAPAN AIRLINES and Gaztransport Technigaz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz 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 Gaztransport Technigaz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport Technigaz has no effect on the direction of JAPAN AIRLINES i.e., JAPAN AIRLINES and Gaztransport Technigaz go up and down completely randomly.
Pair Corralation between JAPAN AIRLINES and Gaztransport Technigaz
Assuming the 90 days trading horizon JAPAN AIRLINES is expected to generate 1.24 times less return on investment than Gaztransport Technigaz. But when comparing it to its historical volatility, JAPAN AIRLINES is 1.2 times less risky than Gaztransport Technigaz. It trades about 0.03 of its potential returns per unit of risk. Gaztransport Technigaz SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 12,190 in Gaztransport Technigaz SA on September 29, 2024 and sell it today you would earn a total of 590.00 from holding Gaztransport Technigaz SA or generate 4.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JAPAN AIRLINES vs. Gaztransport Technigaz SA
Performance |
| Timeline |
| JAPAN AIRLINES |
| Gaztransport Technigaz |
JAPAN AIRLINES and Gaztransport Technigaz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JAPAN AIRLINES and Gaztransport Technigaz
The main advantage of trading using opposite JAPAN AIRLINES and Gaztransport Technigaz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JAPAN AIRLINES position performs unexpectedly, Gaztransport Technigaz 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 Gaztransport Technigaz will offset losses from the drop in Gaztransport Technigaz's long position.| JAPAN AIRLINES vs. G III Apparel Group | JAPAN AIRLINES vs. Evolution Mining Limited | JAPAN AIRLINES vs. International Consolidated Airlines | JAPAN AIRLINES vs. KENNAMETAL INC |
| Gaztransport Technigaz vs. Halliburton | Gaztransport Technigaz vs. Baker Hughes Co | Gaztransport Technigaz vs. Tenaris SA | Gaztransport Technigaz vs. China Oilfield Services |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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