Correlation Between JAPAN TOBACCO and KION Group
Can any of the company-specific risk be diversified away by investing in both JAPAN TOBACCO and KION 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 KION Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JAPAN TOBACCO UNSPADR12 and KION Group AG, you can compare the effects of market volatilities on JAPAN TOBACCO and KION 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 KION Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of JAPAN TOBACCO and KION Group.
Diversification Opportunities for JAPAN TOBACCO and KION Group
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JAPAN and KION is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding JAPAN TOBACCO UNSPADR12 and KION Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KION Group 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 KION Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KION Group AG has no effect on the direction of JAPAN TOBACCO i.e., JAPAN TOBACCO and KION Group go up and down completely randomly.
Pair Corralation between JAPAN TOBACCO and KION Group
Assuming the 90 days trading horizon JAPAN TOBACCO UNSPADR12 is expected to generate 0.66 times more return on investment than KION Group. However, JAPAN TOBACCO UNSPADR12 is 1.52 times less risky than KION Group. It trades about 0.05 of its potential returns per unit of risk. KION Group AG is currently generating about -0.15 per unit of risk. If you would invest 1,220 in JAPAN TOBACCO UNSPADR12 on August 29, 2024 and sell it today you would earn a total of 20.00 from holding JAPAN TOBACCO UNSPADR12 or generate 1.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JAPAN TOBACCO UNSPADR12 vs. KION Group AG
Performance |
| Timeline |
| JAPAN TOBACCO UNSPADR12 |
| KION Group AG |
JAPAN TOBACCO and KION Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JAPAN TOBACCO and KION Group
The main advantage of trading using opposite JAPAN TOBACCO and KION Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JAPAN TOBACCO position performs unexpectedly, KION 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 KION Group will offset losses from the drop in KION Group's long position.The idea behind JAPAN TOBACCO UNSPADR12 and KION Group AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| KION Group vs. EAST SIDE GAMES | KION Group vs. Townsquare Media | KION Group vs. Hollywood Bowl Group | KION Group vs. Ubisoft Entertainment SA |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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