Correlation Between Jardine Matheson and Marubeni Corp
Can any of the company-specific risk be diversified away by investing in both Jardine Matheson and Marubeni Corp 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 Matheson and Marubeni Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jardine Matheson Holdings and Marubeni Corp ADR, you can compare the effects of market volatilities on Jardine Matheson and Marubeni Corp 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 Matheson with a short position of Marubeni Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jardine Matheson and Marubeni Corp.
Diversification Opportunities for Jardine Matheson and Marubeni Corp
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jardine and Marubeni is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Jardine Matheson Holdings and Marubeni Corp ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marubeni Corp ADR and Jardine Matheson 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 Matheson Holdings are associated (or correlated) with Marubeni Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marubeni Corp ADR has no effect on the direction of Jardine Matheson i.e., Jardine Matheson and Marubeni Corp go up and down completely randomly.
Pair Corralation between Jardine Matheson and Marubeni Corp
Assuming the 90 days horizon Jardine Matheson Holdings is expected to generate 0.75 times more return on investment than Marubeni Corp. However, Jardine Matheson Holdings is 1.34 times less risky than Marubeni Corp. It trades about 0.47 of its potential returns per unit of risk. Marubeni Corp ADR is currently generating about 0.0 per unit of risk. If you would invest 3,832 in Jardine Matheson Holdings on September 1, 2024 and sell it today you would earn a total of 505.00 from holding Jardine Matheson Holdings or generate 13.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jardine Matheson Holdings vs. Marubeni Corp ADR
Performance |
| Timeline |
| Jardine Matheson Holdings |
| Marubeni Corp ADR |
Jardine Matheson and Marubeni Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jardine Matheson and Marubeni Corp
The main advantage of trading using opposite Jardine Matheson and Marubeni Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jardine Matheson position performs unexpectedly, Marubeni Corp 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 Marubeni Corp will offset losses from the drop in Marubeni Corp's long position.| Jardine Matheson vs. Seychelle Environmtl | Jardine Matheson vs. Energy and Water | Jardine Matheson vs. One World Universe | Jardine Matheson vs. Vow ASA |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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