Correlation Between Japan Tobacco and GALENA MINING
Can any of the company-specific risk be diversified away by investing in both Japan Tobacco and GALENA MINING 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 GALENA MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Tobacco and GALENA MINING LTD, you can compare the effects of market volatilities on Japan Tobacco and GALENA MINING 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 GALENA MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Tobacco and GALENA MINING.
Diversification Opportunities for Japan Tobacco and GALENA MINING
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Japan and GALENA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Japan Tobacco and GALENA MINING LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GALENA MINING LTD 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 GALENA MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GALENA MINING LTD has no effect on the direction of Japan Tobacco i.e., Japan Tobacco and GALENA MINING go up and down completely randomly.
Pair Corralation between Japan Tobacco and GALENA MINING
Assuming the 90 days horizon Japan Tobacco is expected to generate 0.25 times more return on investment than GALENA MINING. However, Japan Tobacco is 4.07 times less risky than GALENA MINING. It trades about 0.05 of its potential returns per unit of risk. GALENA MINING LTD is currently generating about -0.01 per unit of risk. If you would invest 1,926 in Japan Tobacco on September 3, 2024 and sell it today you would earn a total of 710.00 from holding Japan Tobacco or generate 36.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Japan Tobacco vs. GALENA MINING LTD
Performance |
| Timeline |
| Japan Tobacco |
| GALENA MINING LTD |
Japan Tobacco and GALENA MINING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Tobacco and GALENA MINING
The main advantage of trading using opposite Japan Tobacco and GALENA MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Tobacco position performs unexpectedly, GALENA MINING 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 GALENA MINING will offset losses from the drop in GALENA MINING's long position.| Japan Tobacco vs. British American Tobacco | Japan Tobacco vs. British American Tobacco | Japan Tobacco vs. JAPAN TOBACCO UNSPADR12 | Japan Tobacco vs. Imperial Brands PLC |
| GALENA MINING vs. Sekisui Chemical Co | GALENA MINING vs. CHEMICAL INDUSTRIES | GALENA MINING vs. Quaker Chemical | GALENA MINING vs. Citic Telecom International |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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