Correlation Between Japan Tobacco and HYATT HOTELS
Can any of the company-specific risk be diversified away by investing in both Japan Tobacco and HYATT HOTELS 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 HYATT HOTELS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Tobacco and HYATT HOTELS A, you can compare the effects of market volatilities on Japan Tobacco and HYATT HOTELS 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 HYATT HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Tobacco and HYATT HOTELS.
Diversification Opportunities for Japan Tobacco and HYATT HOTELS
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Japan and HYATT is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Japan Tobacco and HYATT HOTELS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYATT HOTELS A 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 are associated (or correlated) with HYATT HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYATT HOTELS A has no effect on the direction of Japan Tobacco i.e., Japan Tobacco and HYATT HOTELS go up and down completely randomly.
Pair Corralation between Japan Tobacco and HYATT HOTELS
Assuming the 90 days horizon Japan Tobacco is expected to generate 0.93 times more return on investment than HYATT HOTELS. However, Japan Tobacco is 1.08 times less risky than HYATT HOTELS. It trades about 0.03 of its potential returns per unit of risk. HYATT HOTELS A is currently generating about 0.02 per unit of risk. If you would invest 2,501 in Japan Tobacco on September 3, 2024 and sell it today you would earn a total of 135.00 from holding Japan Tobacco or generate 5.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Tobacco vs. HYATT HOTELS A
Performance |
| Timeline |
| Japan Tobacco |
| HYATT HOTELS A |
Japan Tobacco and HYATT HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Tobacco and HYATT HOTELS
The main advantage of trading using opposite Japan Tobacco and HYATT HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Tobacco position performs unexpectedly, HYATT HOTELS 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 HYATT HOTELS will offset losses from the drop in HYATT HOTELS's long position.| Japan Tobacco vs. British American Tobacco | Japan Tobacco vs. JAPAN TOBACCO UNSPADR12 | Japan Tobacco vs. Imperial Brands PLC |
| HYATT HOTELS vs. PKSHA TECHNOLOGY INC | HYATT HOTELS vs. DATANG INTL POW | HYATT HOTELS vs. National Storage Affiliates | HYATT HOTELS vs. AECOM TECHNOLOGY |
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.
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