Correlation Between Japan Medical and CHINA TONTINE
Can any of the company-specific risk be diversified away by investing in both Japan Medical and CHINA TONTINE 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 Medical and CHINA TONTINE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Medical Dynamic and CHINA TONTINE WINES, you can compare the effects of market volatilities on Japan Medical and CHINA TONTINE 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 Medical with a short position of CHINA TONTINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Medical and CHINA TONTINE.
Diversification Opportunities for Japan Medical and CHINA TONTINE
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Japan and CHINA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Japan Medical Dynamic and CHINA TONTINE WINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA TONTINE WINES and Japan Medical 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 Medical Dynamic are associated (or correlated) with CHINA TONTINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA TONTINE WINES has no effect on the direction of Japan Medical i.e., Japan Medical and CHINA TONTINE go up and down completely randomly.
Pair Corralation between Japan Medical and CHINA TONTINE
Assuming the 90 days horizon Japan Medical Dynamic is expected to under-perform the CHINA TONTINE. But the stock apears to be less risky and, when comparing its historical volatility, Japan Medical Dynamic is 21.58 times less risky than CHINA TONTINE. The stock trades about -0.05 of its potential returns per unit of risk. The CHINA TONTINE WINES is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 0.70 in CHINA TONTINE WINES on August 30, 2024 and sell it today you would earn a total of 6.30 from holding CHINA TONTINE WINES or generate 900.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Medical Dynamic vs. CHINA TONTINE WINES
Performance |
| Timeline |
| Japan Medical Dynamic |
| CHINA TONTINE WINES |
Japan Medical and CHINA TONTINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Medical and CHINA TONTINE
The main advantage of trading using opposite Japan Medical and CHINA TONTINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Medical position performs unexpectedly, CHINA TONTINE 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 CHINA TONTINE will offset losses from the drop in CHINA TONTINE's long position.| Japan Medical vs. Medtronic PLC | Japan Medical vs. Stryker | Japan Medical vs. Boston Scientific | Japan Medical vs. Edwards Lifesciences |
| CHINA TONTINE vs. SPORTING | CHINA TONTINE vs. X FAB Silicon Foundries | CHINA TONTINE vs. Transport International Holdings | CHINA TONTINE vs. MACOM Technology Solutions |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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