Correlation Between JAPAN TOBACCO and MHP Hotel
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By analyzing existing cross correlation between JAPAN TOBACCO UNSPADR12 and MHP Hotel AG, you can compare the effects of market volatilities on JAPAN TOBACCO and MHP Hotel 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 MHP Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of JAPAN TOBACCO and MHP Hotel.
Diversification Opportunities for JAPAN TOBACCO and MHP Hotel
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JAPAN and MHP is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding JAPAN TOBACCO UNSPADR12 and MHP Hotel AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MHP Hotel AG 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 UNSPADR12 are associated (or correlated) with MHP Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MHP Hotel AG has no effect on the direction of JAPAN TOBACCO i.e., JAPAN TOBACCO and MHP Hotel go up and down completely randomly.
Pair Corralation between JAPAN TOBACCO and MHP Hotel
Assuming the 90 days trading horizon JAPAN TOBACCO UNSPADR12 is expected to under-perform the MHP Hotel. But the stock apears to be less risky and, when comparing its historical volatility, JAPAN TOBACCO UNSPADR12 is 2.34 times less risky than MHP Hotel. The stock trades about -0.07 of its potential returns per unit of risk. The MHP Hotel AG is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 127.00 in MHP Hotel AG on November 7, 2024 and sell it today you would earn a total of 2.00 from holding MHP Hotel AG or generate 1.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JAPAN TOBACCO UNSPADR12 vs. MHP Hotel AG
Performance |
| Timeline |
| JAPAN TOBACCO UNSPADR12 |
| MHP Hotel AG |
JAPAN TOBACCO and MHP Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JAPAN TOBACCO and MHP Hotel
The main advantage of trading using opposite JAPAN TOBACCO and MHP Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JAPAN TOBACCO position performs unexpectedly, MHP Hotel 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 MHP Hotel will offset losses from the drop in MHP Hotel's long position.| JAPAN TOBACCO vs. Synovus Financial Corp | JAPAN TOBACCO vs. PATTIES FOODS | JAPAN TOBACCO vs. PLANT VEDA FOODS | JAPAN TOBACCO vs. CAL MAINE FOODS |
| MHP Hotel vs. Lloyds Banking Group | MHP Hotel vs. KB Financial Group | MHP Hotel vs. ORIX Corporation | MHP Hotel vs. Orix Corp Ads |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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