Correlation Between Japan Asia and New York
Can any of the company-specific risk be diversified away by investing in both Japan Asia and New York 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 New York 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 New York Community, you can compare the effects of market volatilities on Japan Asia and New York 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 New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Asia and New York.
Diversification Opportunities for Japan Asia and New York
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Japan and New is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Japan Asia Investment and New York Community in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New York Community 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 New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New York Community has no effect on the direction of Japan Asia i.e., Japan Asia and New York go up and down completely randomly.
Pair Corralation between Japan Asia and New York
Assuming the 90 days horizon Japan Asia Investment is expected to generate 0.79 times more return on investment than New York. However, Japan Asia Investment is 1.27 times less risky than New York. It trades about -0.07 of its potential returns per unit of risk. New York Community is currently generating about -0.46 per unit of risk. If you would invest 129.00 in Japan Asia Investment on October 9, 2024 and sell it today you would lose (3.00) from holding Japan Asia Investment or give up 2.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Asia Investment vs. New York Community
Performance |
| Timeline |
| Japan Asia Investment |
| New York Community |
Japan Asia and New York Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Asia and New York
The main advantage of trading using opposite Japan Asia and New York positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Asia position performs unexpectedly, New York 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 New York will offset losses from the drop in New York's long position.| Japan Asia vs. Tsingtao Brewery | Japan Asia vs. Treasury Wine Estates | Japan Asia vs. United Breweries Co | Japan Asia vs. Marie Brizard Wine |
| New York vs. Microbot Medical | New York vs. Corporate Office Properties | New York vs. Merit Medical Systems | New York vs. CITY OFFICE REIT |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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