Correlation Between Japan Tobacco and CRAWFORD +
Can any of the company-specific risk be diversified away by investing in both Japan Tobacco and CRAWFORD + 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 CRAWFORD + into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Tobacco and CRAWFORD A NV, you can compare the effects of market volatilities on Japan Tobacco and CRAWFORD + 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 CRAWFORD +. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Tobacco and CRAWFORD +.
Diversification Opportunities for Japan Tobacco and CRAWFORD +
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Japan and CRAWFORD is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Japan Tobacco and CRAWFORD A NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CRAWFORD A NV 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 CRAWFORD +. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CRAWFORD A NV has no effect on the direction of Japan Tobacco i.e., Japan Tobacco and CRAWFORD + go up and down completely randomly.
Pair Corralation between Japan Tobacco and CRAWFORD +
Assuming the 90 days horizon Japan Tobacco is expected to under-perform the CRAWFORD +. But the stock apears to be less risky and, when comparing its historical volatility, Japan Tobacco is 1.92 times less risky than CRAWFORD +. The stock trades about -0.07 of its potential returns per unit of risk. The CRAWFORD A NV is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,080 in CRAWFORD A NV on November 6, 2024 and sell it today you would earn a total of 30.00 from holding CRAWFORD A NV or generate 2.78% 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. CRAWFORD A NV
Performance |
| Timeline |
| Japan Tobacco |
| CRAWFORD A NV |
Japan Tobacco and CRAWFORD + Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Tobacco and CRAWFORD +
The main advantage of trading using opposite Japan Tobacco and CRAWFORD + positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Tobacco position performs unexpectedly, CRAWFORD + 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 CRAWFORD + will offset losses from the drop in CRAWFORD +'s long position.| Japan Tobacco vs. UPDATE SOFTWARE | Japan Tobacco vs. ECHO INVESTMENT ZY | Japan Tobacco vs. HK Electric Investments | Japan Tobacco vs. PKSHA TECHNOLOGY INC |
| CRAWFORD + vs. TRAVEL LEISURE DL 01 | CRAWFORD + vs. Fuji Media Holdings | CRAWFORD + vs. Townsquare Media | CRAWFORD + vs. Flutter Entertainment PLC |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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