Correlation Between JAPAN AIRLINES and Chuangs China
Can any of the company-specific risk be diversified away by investing in both JAPAN AIRLINES and Chuangs China 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 Chuangs China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JAPAN AIRLINES and Chuangs China Investments, you can compare the effects of market volatilities on JAPAN AIRLINES and Chuangs China 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 Chuangs China. Check out your portfolio center. Please also check ongoing floating volatility patterns of JAPAN AIRLINES and Chuangs China.
Diversification Opportunities for JAPAN AIRLINES and Chuangs China
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between JAPAN and Chuangs is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding JAPAN AIRLINES and Chuangs China Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chuangs China Investments 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 Chuangs China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chuangs China Investments has no effect on the direction of JAPAN AIRLINES i.e., JAPAN AIRLINES and Chuangs China go up and down completely randomly.
Pair Corralation between JAPAN AIRLINES and Chuangs China
If you would invest 1,440 in JAPAN AIRLINES on August 28, 2024 and sell it today you would earn a total of 30.00 from holding JAPAN AIRLINES or generate 2.08% 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. Chuangs China Investments
Performance |
| Timeline |
| JAPAN AIRLINES |
| Chuangs China Investments |
JAPAN AIRLINES and Chuangs China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JAPAN AIRLINES and Chuangs China
The main advantage of trading using opposite JAPAN AIRLINES and Chuangs China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JAPAN AIRLINES position performs unexpectedly, Chuangs China 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 Chuangs China will offset losses from the drop in Chuangs China's long position.| JAPAN AIRLINES vs. Hyrican Informationssysteme Aktiengesellschaft | JAPAN AIRLINES vs. Sunny Optical Technology | JAPAN AIRLINES vs. INFORMATION SVC GRP | JAPAN AIRLINES vs. NetSol Technologies |
| Chuangs China vs. Superior Plus Corp | Chuangs China vs. NMI Holdings | Chuangs China vs. Origin Agritech | Chuangs China vs. SIVERS SEMICONDUCTORS AB |
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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