Correlation Between Japan Tobacco and Occidental Petroleum
Can any of the company-specific risk be diversified away by investing in both Japan Tobacco and Occidental Petroleum 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 Occidental Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Tobacco and Occidental Petroleum, you can compare the effects of market volatilities on Japan Tobacco and Occidental Petroleum 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 Occidental Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Tobacco and Occidental Petroleum.
Diversification Opportunities for Japan Tobacco and Occidental Petroleum
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Japan and Occidental is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Japan Tobacco and Occidental Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Occidental Petroleum 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 Occidental Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Occidental Petroleum has no effect on the direction of Japan Tobacco i.e., Japan Tobacco and Occidental Petroleum go up and down completely randomly.
Pair Corralation between Japan Tobacco and Occidental Petroleum
If you would invest 1,872 in Japan Tobacco on November 5, 2024 and sell it today you would earn a total of 587.00 from holding Japan Tobacco or generate 31.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.2% |
| Values | Daily Returns |
Japan Tobacco vs. Occidental Petroleum
Performance |
| Timeline |
| Japan Tobacco |
| Occidental Petroleum |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Japan Tobacco and Occidental Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Tobacco and Occidental Petroleum
The main advantage of trading using opposite Japan Tobacco and Occidental Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Tobacco position performs unexpectedly, Occidental Petroleum 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 Occidental Petroleum will offset losses from the drop in Occidental Petroleum's long position.| Japan Tobacco vs. Take Two Interactive Software | Japan Tobacco vs. Check Point Software | Japan Tobacco vs. United Utilities Group | Japan Tobacco vs. Addtech AB |
| Occidental Petroleum vs. ZINC MEDIA GR | Occidental Petroleum vs. Fuji Media Holdings | Occidental Petroleum vs. SENECA FOODS A | Occidental Petroleum vs. TOWNSQUARE MEDIA INC |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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