Correlation Between Japan Tobacco and Intchains Group
Can any of the company-specific risk be diversified away by investing in both Japan Tobacco and Intchains Group 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 Tobacco and Intchains Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Tobacco ADR and Intchains Group Limited, you can compare the effects of market volatilities on Japan Tobacco and Intchains Group 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 Tobacco with a short position of Intchains Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Tobacco and Intchains Group.
Diversification Opportunities for Japan Tobacco and Intchains Group
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Japan and Intchains is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Japan Tobacco ADR and Intchains Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intchains Group and Japan Tobacco 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 Tobacco ADR are associated (or correlated) with Intchains Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intchains Group has no effect on the direction of Japan Tobacco i.e., Japan Tobacco and Intchains Group go up and down completely randomly.
Pair Corralation between Japan Tobacco and Intchains Group
Assuming the 90 days horizon Japan Tobacco ADR is expected to generate 0.15 times more return on investment than Intchains Group. However, Japan Tobacco ADR is 6.81 times less risky than Intchains Group. It trades about -0.02 of its potential returns per unit of risk. Intchains Group Limited is currently generating about -0.08 per unit of risk. If you would invest 1,427 in Japan Tobacco ADR on September 2, 2024 and sell it today you would lose (23.00) from holding Japan Tobacco ADR or give up 1.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Tobacco ADR vs. Intchains Group Limited
Performance |
| Timeline |
| Japan Tobacco ADR |
| Intchains Group |
Japan Tobacco and Intchains Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Tobacco and Intchains Group
The main advantage of trading using opposite Japan Tobacco and Intchains Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Tobacco position performs unexpectedly, Intchains Group 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 Intchains Group will offset losses from the drop in Intchains Group's long position.| Japan Tobacco vs. British American Tobacco | Japan Tobacco vs. Imperial Brands PLC | Japan Tobacco vs. RLX Technology | Japan Tobacco vs. British American Tobacco |
| Intchains Group vs. The Gap, | Intchains Group vs. BBB Foods | Intchains Group vs. SunLink Health Systems | Intchains Group vs. Transocean |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |