Correlation Between JAPAN TOBACCO and TriMas
Can any of the company-specific risk be diversified away by investing in both JAPAN TOBACCO and TriMas 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 TriMas 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 TriMas, you can compare the effects of market volatilities on JAPAN TOBACCO and TriMas 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 TriMas. Check out your portfolio center. Please also check ongoing floating volatility patterns of JAPAN TOBACCO and TriMas.
Diversification Opportunities for JAPAN TOBACCO and TriMas
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JAPAN and TriMas is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding JAPAN TOBACCO UNSPADR12 and TriMas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TriMas 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 TriMas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TriMas has no effect on the direction of JAPAN TOBACCO i.e., JAPAN TOBACCO and TriMas go up and down completely randomly.
Pair Corralation between JAPAN TOBACCO and TriMas
Assuming the 90 days trading horizon JAPAN TOBACCO UNSPADR12 is expected to generate 0.41 times more return on investment than TriMas. However, JAPAN TOBACCO UNSPADR12 is 2.45 times less risky than TriMas. It trades about -0.17 of its potential returns per unit of risk. TriMas is currently generating about -0.1 per unit of risk. If you would invest 1,210 in JAPAN TOBACCO UNSPADR12 on October 24, 2024 and sell it today you would lose (60.00) from holding JAPAN TOBACCO UNSPADR12 or give up 4.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JAPAN TOBACCO UNSPADR12 vs. TriMas
Performance |
| Timeline |
| JAPAN TOBACCO UNSPADR12 |
| TriMas |
JAPAN TOBACCO and TriMas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JAPAN TOBACCO and TriMas
The main advantage of trading using opposite JAPAN TOBACCO and TriMas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JAPAN TOBACCO position performs unexpectedly, TriMas 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 TriMas will offset losses from the drop in TriMas' long position.| JAPAN TOBACCO vs. THAI BEVERAGE | JAPAN TOBACCO vs. Hua Hong Semiconductor | JAPAN TOBACCO vs. CAL MAINE FOODS | JAPAN TOBACCO vs. NXP Semiconductors NV |
| TriMas vs. Synovus Financial Corp | TriMas vs. REVO INSURANCE SPA | TriMas vs. Webster Financial | TriMas vs. TIANDE CHEMICAL |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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