Correlation Between Japan Asia and Hexcel
Can any of the company-specific risk be diversified away by investing in both Japan Asia and Hexcel 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 Hexcel 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 Hexcel, you can compare the effects of market volatilities on Japan Asia and Hexcel 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 Hexcel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Asia and Hexcel.
Diversification Opportunities for Japan Asia and Hexcel
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Japan and Hexcel is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Japan Asia Investment and Hexcel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hexcel 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 Hexcel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hexcel has no effect on the direction of Japan Asia i.e., Japan Asia and Hexcel go up and down completely randomly.
Pair Corralation between Japan Asia and Hexcel
Assuming the 90 days horizon Japan Asia Investment is expected to under-perform the Hexcel. In addition to that, Japan Asia is 1.01 times more volatile than Hexcel. It trades about -0.06 of its total potential returns per unit of risk. Hexcel is currently generating about 0.16 per unit of volatility. If you would invest 5,700 in Hexcel on September 13, 2024 and sell it today you would earn a total of 300.00 from holding Hexcel or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Asia Investment vs. Hexcel
Performance |
| Timeline |
| Japan Asia Investment |
| Hexcel |
Japan Asia and Hexcel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Asia and Hexcel
The main advantage of trading using opposite Japan Asia and Hexcel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Asia position performs unexpectedly, Hexcel 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 Hexcel will offset losses from the drop in Hexcel'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 |
| Hexcel vs. Verizon Communications | Hexcel vs. Iridium Communications | Hexcel vs. CHINA TELECOM H | Hexcel vs. Citic Telecom International |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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