Correlation Between Japan Asia and National Health
Can any of the company-specific risk be diversified away by investing in both Japan Asia and National 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 Asia and National Health 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 National Health Investors, you can compare the effects of market volatilities on Japan Asia and National 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 Asia with a short position of National Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Asia and National Health.
Diversification Opportunities for Japan Asia and National Health
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Japan and National is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Japan Asia Investment and National Health Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Health Investors 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 National Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Health Investors has no effect on the direction of Japan Asia i.e., Japan Asia and National Health go up and down completely randomly.
Pair Corralation between Japan Asia and National Health
Assuming the 90 days horizon Japan Asia Investment is expected to generate 1.16 times more return on investment than National Health. However, Japan Asia is 1.16 times more volatile than National Health Investors. It trades about 0.15 of its potential returns per unit of risk. National Health Investors is currently generating about 0.06 per unit of risk. If you would invest 122.00 in Japan Asia Investment on October 22, 2024 and sell it today you would earn a total of 5.00 from holding Japan Asia Investment or generate 4.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Asia Investment vs. National Health Investors
Performance |
| Timeline |
| Japan Asia Investment |
| National Health Investors |
Japan Asia and National Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Asia and National Health
The main advantage of trading using opposite Japan Asia and National Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Asia position performs unexpectedly, National 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 National Health will offset losses from the drop in National Health's long position.| Japan Asia vs. DATATEC LTD 2 | Japan Asia vs. Unity Software | Japan Asia vs. DATANG INTL POW | Japan Asia vs. China Datang |
| National Health vs. VITEC SOFTWARE GROUP | National Health vs. FORMPIPE SOFTWARE AB | National Health vs. UPDATE SOFTWARE | National Health vs. Cairo Communication SpA |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Transaction History View history of all your transactions and understand their impact on performance |