Correlation Between Japan Tobacco and Strix Group
Can any of the company-specific risk be diversified away by investing in both Japan Tobacco and Strix Group 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 Strix Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Tobacco and Strix Group Plc, you can compare the effects of market volatilities on Japan Tobacco and Strix Group 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 Strix Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Tobacco and Strix Group.
Diversification Opportunities for Japan Tobacco and Strix Group
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Japan and Strix is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Japan Tobacco and Strix Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strix Group Plc 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 Strix Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strix Group Plc has no effect on the direction of Japan Tobacco i.e., Japan Tobacco and Strix Group go up and down completely randomly.
Pair Corralation between Japan Tobacco and Strix Group
Assuming the 90 days horizon Japan Tobacco is expected to generate 0.49 times more return on investment than Strix Group. However, Japan Tobacco is 2.05 times less risky than Strix Group. It trades about 0.05 of its potential returns per unit of risk. Strix Group Plc is currently generating about -0.02 per unit of risk. If you would invest 1,857 in Japan Tobacco on August 27, 2024 and sell it today you would earn a total of 701.00 from holding Japan Tobacco or generate 37.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Tobacco vs. Strix Group Plc
Performance |
| Timeline |
| Japan Tobacco |
| Strix Group Plc |
Japan Tobacco and Strix Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Tobacco and Strix Group
The main advantage of trading using opposite Japan Tobacco and Strix Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Tobacco position performs unexpectedly, Strix Group 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 Strix Group will offset losses from the drop in Strix Group's long position.| Japan Tobacco vs. Titan Machinery | Japan Tobacco vs. WIMFARM SA EO | Japan Tobacco vs. DAIRY FARM INTL | Japan Tobacco vs. North American Construction |
| Strix Group vs. Japan Tobacco | Strix Group vs. Transport International Holdings | Strix Group vs. Taiwan Semiconductor Manufacturing | Strix Group vs. UPDATE SOFTWARE |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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