Correlation Between Jardine Cycle and Teijin
Can any of the company-specific risk be diversified away by investing in both Jardine Cycle and Teijin 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 Jardine Cycle and Teijin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jardine Cycle Carriage and Teijin, you can compare the effects of market volatilities on Jardine Cycle and Teijin 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 Jardine Cycle with a short position of Teijin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jardine Cycle and Teijin.
Diversification Opportunities for Jardine Cycle and Teijin
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Jardine and Teijin is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Jardine Cycle Carriage and Teijin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teijin and Jardine Cycle 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 Jardine Cycle Carriage are associated (or correlated) with Teijin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teijin has no effect on the direction of Jardine Cycle i.e., Jardine Cycle and Teijin go up and down completely randomly.
Pair Corralation between Jardine Cycle and Teijin
Assuming the 90 days horizon Jardine Cycle Carriage is expected to generate 0.79 times more return on investment than Teijin. However, Jardine Cycle Carriage is 1.26 times less risky than Teijin. It trades about 0.04 of its potential returns per unit of risk. Teijin is currently generating about -0.03 per unit of risk. If you would invest 1,787 in Jardine Cycle Carriage on September 1, 2024 and sell it today you would earn a total of 163.00 from holding Jardine Cycle Carriage or generate 9.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Jardine Cycle Carriage vs. Teijin
Performance |
| Timeline |
| Jardine Cycle Carriage |
| Teijin |
Jardine Cycle and Teijin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jardine Cycle and Teijin
The main advantage of trading using opposite Jardine Cycle and Teijin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jardine Cycle position performs unexpectedly, Teijin 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 Teijin will offset losses from the drop in Teijin's long position.| Jardine Cycle vs. Volkswagen AG 110 | Jardine Cycle vs. Stellantis NV | Jardine Cycle vs. Toyota Motor | Jardine Cycle vs. Honda Motor Co |
| Teijin vs. Toray Industries ADR | Teijin vs. Nitto Denko Corp | Teijin vs. NSK Ltd ADR | Teijin vs. Secom Co Ltd |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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