Correlation Between JPX Global and Tomra Systems
Can any of the company-specific risk be diversified away by investing in both JPX Global and Tomra Systems 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 JPX Global and Tomra Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JPX Global and Tomra Systems ASA, you can compare the effects of market volatilities on JPX Global and Tomra Systems 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 JPX Global with a short position of Tomra Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPX Global and Tomra Systems.
Diversification Opportunities for JPX Global and Tomra Systems
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JPX and Tomra is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding JPX Global and Tomra Systems ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tomra Systems ASA and JPX Global 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 JPX Global are associated (or correlated) with Tomra Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tomra Systems ASA has no effect on the direction of JPX Global i.e., JPX Global and Tomra Systems go up and down completely randomly.
Pair Corralation between JPX Global and Tomra Systems
Given the investment horizon of 90 days JPX Global is expected to generate 11.35 times more return on investment than Tomra Systems. However, JPX Global is 11.35 times more volatile than Tomra Systems ASA. It trades about 0.08 of its potential returns per unit of risk. Tomra Systems ASA is currently generating about -0.01 per unit of risk. If you would invest 0.18 in JPX Global on September 3, 2024 and sell it today you would lose (0.17) from holding JPX Global or give up 94.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 81.68% |
| Values | Daily Returns |
JPX Global vs. Tomra Systems ASA
Performance |
| Timeline |
| JPX Global |
| Tomra Systems ASA |
JPX Global and Tomra Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPX Global and Tomra Systems
The main advantage of trading using opposite JPX Global and Tomra Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPX Global position performs unexpectedly, Tomra Systems 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 Tomra Systems will offset losses from the drop in Tomra Systems' long position.| JPX Global vs. TOMI Environmental Solutions | JPX Global vs. SCOR PK | JPX Global vs. HUMANA INC | JPX Global vs. Aquagold International |
| Tomra Systems vs. Republic Services | Tomra Systems vs. Waste Connections | Tomra Systems vs. Clean Harbors | Tomra Systems vs. Gfl Environmental Holdings |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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