Correlation Between Japan Tobacco and EPlay Digital

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Can any of the company-specific risk be diversified away by investing in both Japan Tobacco and EPlay Digital 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 EPlay Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Tobacco and ePlay Digital, you can compare the effects of market volatilities on Japan Tobacco and EPlay Digital 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 EPlay Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Tobacco and EPlay Digital.

Diversification Opportunities for Japan Tobacco and EPlay Digital

JapanEPlayDiversified AwayJapanEPlayDiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Japan and EPlay is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Japan Tobacco and ePlay Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ePlay Digital 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 EPlay Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ePlay Digital has no effect on the direction of Japan Tobacco i.e., Japan Tobacco and EPlay Digital go up and down completely randomly.

Pair Corralation between Japan Tobacco and EPlay Digital

If you would invest  0.10  in ePlay Digital on November 30, 2024 and sell it today you would earn a total of  0.00  from holding ePlay Digital or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Japan Tobacco  vs.  ePlay Digital

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -6-4-20246
JavaScript chart by amCharts 3.21.15JAT 2NY2
       Timeline  
Japan Tobacco 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Japan Tobacco has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb23.52424.52525.526
ePlay Digital 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days ePlay Digital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, EPlay Digital is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.0010.00105

Japan Tobacco and EPlay Digital Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.35-1.78-1.21-0.64-0.06850.471.041.612.182.75 0.050.100.15
JavaScript chart by amCharts 3.21.15JAT 2NY2
       Returns  

Pair Trading with Japan Tobacco and EPlay Digital

The main advantage of trading using opposite Japan Tobacco and EPlay Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Tobacco position performs unexpectedly, EPlay Digital 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 EPlay Digital will offset losses from the drop in EPlay Digital's long position.
The idea behind Japan Tobacco and ePlay Digital pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.

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