Correlation Between Jiangsu Expressway and Japan Post
Can any of the company-specific risk be diversified away by investing in both Jiangsu Expressway and Japan Post 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 Jiangsu Expressway and Japan Post into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jiangsu Expressway and Japan Post Insurance, you can compare the effects of market volatilities on Jiangsu Expressway and Japan Post 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 Jiangsu Expressway with a short position of Japan Post. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Expressway and Japan Post.
Diversification Opportunities for Jiangsu Expressway and Japan Post
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jiangsu and Japan is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Expressway and Japan Post Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Post Insurance and Jiangsu Expressway 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 Jiangsu Expressway are associated (or correlated) with Japan Post. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Post Insurance has no effect on the direction of Jiangsu Expressway i.e., Jiangsu Expressway and Japan Post go up and down completely randomly.
Pair Corralation between Jiangsu Expressway and Japan Post
Assuming the 90 days horizon Jiangsu Expressway is expected to generate 1.58 times less return on investment than Japan Post. In addition to that, Jiangsu Expressway is 1.19 times more volatile than Japan Post Insurance. It trades about 0.06 of its total potential returns per unit of risk. Japan Post Insurance is currently generating about 0.11 per unit of volatility. If you would invest 1,730 in Japan Post Insurance on September 3, 2024 and sell it today you would earn a total of 230.00 from holding Japan Post Insurance or generate 13.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangsu Expressway vs. Japan Post Insurance
Performance |
| Timeline |
| Jiangsu Expressway |
| Japan Post Insurance |
Jiangsu Expressway and Japan Post Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangsu Expressway and Japan Post
The main advantage of trading using opposite Jiangsu Expressway and Japan Post positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu Expressway position performs unexpectedly, Japan Post 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 Japan Post will offset losses from the drop in Japan Post's long position.| Jiangsu Expressway vs. Big 5 Sporting | Jiangsu Expressway vs. Gaztransport Technigaz SA | Jiangsu Expressway vs. Clean Energy Fuels | Jiangsu Expressway vs. TITANIUM TRANSPORTGROUP |
| Japan Post vs. Entravision Communications | Japan Post vs. Spirent Communications plc | Japan Post vs. JSC Halyk bank | Japan Post vs. Chiba Bank |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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