Correlation Between JAPAN AIRLINES and EIDESVIK OFFSHORE
Can any of the company-specific risk be diversified away by investing in both JAPAN AIRLINES and EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JAPAN AIRLINES and EIDESVIK OFFSHORE NK, you can compare the effects of market volatilities on JAPAN AIRLINES and EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of JAPAN AIRLINES and EIDESVIK OFFSHORE.
Diversification Opportunities for JAPAN AIRLINES and EIDESVIK OFFSHORE
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between JAPAN and EIDESVIK is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding JAPAN AIRLINES and EIDESVIK OFFSHORE NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EIDESVIK OFFSHORE has no effect on the direction of JAPAN AIRLINES i.e., JAPAN AIRLINES and EIDESVIK OFFSHORE go up and down completely randomly.
Pair Corralation between JAPAN AIRLINES and EIDESVIK OFFSHORE
Assuming the 90 days trading horizon JAPAN AIRLINES is expected to generate 0.59 times more return on investment than EIDESVIK OFFSHORE. However, JAPAN AIRLINES is 1.69 times less risky than EIDESVIK OFFSHORE. It trades about 0.17 of its potential returns per unit of risk. EIDESVIK OFFSHORE NK is currently generating about 0.05 per unit of risk. If you would invest 1,520 in JAPAN AIRLINES on November 3, 2024 and sell it today you would earn a total of 60.00 from holding JAPAN AIRLINES or generate 3.95% 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. EIDESVIK OFFSHORE NK
Performance |
| Timeline |
| JAPAN AIRLINES |
| EIDESVIK OFFSHORE |
JAPAN AIRLINES and EIDESVIK OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JAPAN AIRLINES and EIDESVIK OFFSHORE
The main advantage of trading using opposite JAPAN AIRLINES and EIDESVIK OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JAPAN AIRLINES position performs unexpectedly, EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE will offset losses from the drop in EIDESVIK OFFSHORE's long position.| JAPAN AIRLINES vs. ASURE SOFTWARE | JAPAN AIRLINES vs. GBS Software AG | JAPAN AIRLINES vs. Algonquin Power Utilities | JAPAN AIRLINES vs. Guidewire Software |
| EIDESVIK OFFSHORE vs. SIVERS SEMICONDUCTORS AB | EIDESVIK OFFSHORE vs. NorAm Drilling AS | EIDESVIK OFFSHORE vs. Volkswagen AG | EIDESVIK OFFSHORE vs. Darden Restaurants |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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