Correlation Between Japan Asia and GOODTECH ASA
Can any of the company-specific risk be diversified away by investing in both Japan Asia and GOODTECH ASA 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 Asia and GOODTECH ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Asia Investment and GOODTECH ASA A, you can compare the effects of market volatilities on Japan Asia and GOODTECH ASA 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 Asia with a short position of GOODTECH ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Asia and GOODTECH ASA.
Diversification Opportunities for Japan Asia and GOODTECH ASA
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Japan and GOODTECH is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Japan Asia Investment and GOODTECH ASA A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOODTECH ASA A and Japan Asia 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 Asia Investment are associated (or correlated) with GOODTECH ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOODTECH ASA A has no effect on the direction of Japan Asia i.e., Japan Asia and GOODTECH ASA go up and down completely randomly.
Pair Corralation between Japan Asia and GOODTECH ASA
Assuming the 90 days horizon Japan Asia Investment is expected to generate 1.63 times more return on investment than GOODTECH ASA. However, Japan Asia is 1.63 times more volatile than GOODTECH ASA A. It trades about 0.01 of its potential returns per unit of risk. GOODTECH ASA A is currently generating about 0.01 per unit of risk. If you would invest 146.00 in Japan Asia Investment on September 12, 2024 and sell it today you would lose (17.00) from holding Japan Asia Investment or give up 11.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Asia Investment vs. GOODTECH ASA A
Performance |
| Timeline |
| Japan Asia Investment |
| GOODTECH ASA A |
Japan Asia and GOODTECH ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Asia and GOODTECH ASA
The main advantage of trading using opposite Japan Asia and GOODTECH ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Asia position performs unexpectedly, GOODTECH ASA 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 GOODTECH ASA will offset losses from the drop in GOODTECH ASA's long position.| Japan Asia vs. Ameriprise Financial | Japan Asia vs. Ares Management Corp | Japan Asia vs. Superior Plus Corp | Japan Asia vs. SIVERS SEMICONDUCTORS AB |
| GOODTECH ASA vs. REINET INVESTMENTS SCA | GOODTECH ASA vs. Japan Asia Investment | GOODTECH ASA vs. Brockhaus Capital Management | GOODTECH ASA vs. LANDSEA GREEN MANAGEMENT |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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