Correlation Between JAPAN AIRLINES and OPKO HEALTH
Can any of the company-specific risk be diversified away by investing in both JAPAN AIRLINES and OPKO HEALTH 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 OPKO HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JAPAN AIRLINES and OPKO HEALTH, you can compare the effects of market volatilities on JAPAN AIRLINES and OPKO HEALTH 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 OPKO HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of JAPAN AIRLINES and OPKO HEALTH.
Diversification Opportunities for JAPAN AIRLINES and OPKO HEALTH
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JAPAN and OPKO is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding JAPAN AIRLINES and OPKO HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPKO HEALTH 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 OPKO HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPKO HEALTH has no effect on the direction of JAPAN AIRLINES i.e., JAPAN AIRLINES and OPKO HEALTH go up and down completely randomly.
Pair Corralation between JAPAN AIRLINES and OPKO HEALTH
Assuming the 90 days trading horizon JAPAN AIRLINES is expected to under-perform the OPKO HEALTH. But the stock apears to be less risky and, when comparing its historical volatility, JAPAN AIRLINES is 2.16 times less risky than OPKO HEALTH. The stock trades about -0.01 of its potential returns per unit of risk. The OPKO HEALTH is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 114.00 in OPKO HEALTH on November 7, 2024 and sell it today you would earn a total of 31.00 from holding OPKO HEALTH or generate 27.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JAPAN AIRLINES vs. OPKO HEALTH
Performance |
| Timeline |
| JAPAN AIRLINES |
| OPKO HEALTH |
JAPAN AIRLINES and OPKO HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JAPAN AIRLINES and OPKO HEALTH
The main advantage of trading using opposite JAPAN AIRLINES and OPKO HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JAPAN AIRLINES position performs unexpectedly, OPKO HEALTH 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 OPKO HEALTH will offset losses from the drop in OPKO HEALTH's long position.| JAPAN AIRLINES vs. Planet Fitness | JAPAN AIRLINES vs. CHINA TONTINE WINES | JAPAN AIRLINES vs. TT Electronics PLC | JAPAN AIRLINES vs. CLOVER HEALTH INV |
| OPKO HEALTH vs. DATANG INTL POW | OPKO HEALTH vs. Columbia Sportswear | OPKO HEALTH vs. Datadog | OPKO HEALTH vs. NTT DATA |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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