Correlation Between Japan Tobacco and KWS SAAT
Can any of the company-specific risk be diversified away by investing in both Japan Tobacco and KWS SAAT 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 KWS SAAT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Tobacco and KWS SAAT SE, you can compare the effects of market volatilities on Japan Tobacco and KWS SAAT 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 KWS SAAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Tobacco and KWS SAAT.
Diversification Opportunities for Japan Tobacco and KWS SAAT
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Japan and KWS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Japan Tobacco and KWS SAAT SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KWS SAAT SE 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 KWS SAAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KWS SAAT SE has no effect on the direction of Japan Tobacco i.e., Japan Tobacco and KWS SAAT go up and down completely randomly.
Pair Corralation between Japan Tobacco and KWS SAAT
If you would invest 2,418 in Japan Tobacco on January 10, 2025 and sell it today you would earn a total of 55.00 from holding Japan Tobacco or generate 2.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Japan Tobacco vs. KWS SAAT SE
Performance |
| Timeline |
| Japan Tobacco |
| KWS SAAT SE |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Japan Tobacco and KWS SAAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Tobacco and KWS SAAT
The main advantage of trading using opposite Japan Tobacco and KWS SAAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Tobacco position performs unexpectedly, KWS SAAT 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 KWS SAAT will offset losses from the drop in KWS SAAT's long position.| Japan Tobacco vs. COVIVIO HOTELS INH | Japan Tobacco vs. Hyatt Hotels | Japan Tobacco vs. Wyndham Hotels Resorts | Japan Tobacco vs. Keck Seng Investments |
| KWS SAAT vs. CONTAGIOUS GAMING INC | KWS SAAT vs. BAKED GAMES SA | KWS SAAT vs. BRAGG GAMING GRP | KWS SAAT vs. SALESFORCE INC CDR |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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