Correlation Between JAPAN AIRLINES and Pembina Pipeline
Can any of the company-specific risk be diversified away by investing in both JAPAN AIRLINES and Pembina Pipeline 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 Pembina Pipeline into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JAPAN AIRLINES and Pembina Pipeline Corp, you can compare the effects of market volatilities on JAPAN AIRLINES and Pembina Pipeline 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 Pembina Pipeline. Check out your portfolio center. Please also check ongoing floating volatility patterns of JAPAN AIRLINES and Pembina Pipeline.
Diversification Opportunities for JAPAN AIRLINES and Pembina Pipeline
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JAPAN and Pembina is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding JAPAN AIRLINES and Pembina Pipeline Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pembina Pipeline Corp 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 Pembina Pipeline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pembina Pipeline Corp has no effect on the direction of JAPAN AIRLINES i.e., JAPAN AIRLINES and Pembina Pipeline go up and down completely randomly.
Pair Corralation between JAPAN AIRLINES and Pembina Pipeline
Assuming the 90 days trading horizon JAPAN AIRLINES is expected to generate 0.98 times more return on investment than Pembina Pipeline. However, JAPAN AIRLINES is 1.02 times less risky than Pembina Pipeline. It trades about 0.11 of its potential returns per unit of risk. Pembina Pipeline Corp is currently generating about -0.15 per unit of risk. If you would invest 1,440 in JAPAN AIRLINES on September 27, 2024 and sell it today you would earn a total of 80.00 from holding JAPAN AIRLINES or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JAPAN AIRLINES vs. Pembina Pipeline Corp
Performance |
| Timeline |
| JAPAN AIRLINES |
| Pembina Pipeline Corp |
JAPAN AIRLINES and Pembina Pipeline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JAPAN AIRLINES and Pembina Pipeline
The main advantage of trading using opposite JAPAN AIRLINES and Pembina Pipeline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JAPAN AIRLINES position performs unexpectedly, Pembina Pipeline 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 Pembina Pipeline will offset losses from the drop in Pembina Pipeline's long position.| JAPAN AIRLINES vs. Vastned Retail NV | JAPAN AIRLINES vs. Chesapeake Utilities | JAPAN AIRLINES vs. The Trade Desk | JAPAN AIRLINES vs. National Retail Properties |
| Pembina Pipeline vs. ANGLER GAMING PLC | Pembina Pipeline vs. DETALION GAMES SA | Pembina Pipeline vs. JAPAN AIRLINES | Pembina Pipeline vs. GAMING FAC SA |
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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