Correlation Between Japan Post and Deutsche Lufthansa
Can any of the company-specific risk be diversified away by investing in both Japan Post and Deutsche Lufthansa 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 Post and Deutsche Lufthansa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Post Holdings and Deutsche Lufthansa AG, you can compare the effects of market volatilities on Japan Post and Deutsche Lufthansa 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 Post with a short position of Deutsche Lufthansa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Post and Deutsche Lufthansa.
Diversification Opportunities for Japan Post and Deutsche Lufthansa
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Japan and Deutsche is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Japan Post Holdings and Deutsche Lufthansa AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Lufthansa and Japan Post 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 Post Holdings are associated (or correlated) with Deutsche Lufthansa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Lufthansa has no effect on the direction of Japan Post i.e., Japan Post and Deutsche Lufthansa go up and down completely randomly.
Pair Corralation between Japan Post and Deutsche Lufthansa
Assuming the 90 days horizon Japan Post Holdings is expected to under-perform the Deutsche Lufthansa. In addition to that, Japan Post is 21.88 times more volatile than Deutsche Lufthansa AG. It trades about -0.14 of its total potential returns per unit of risk. Deutsche Lufthansa AG is currently generating about -0.01 per unit of volatility. If you would invest 969.00 in Deutsche Lufthansa AG on November 2, 2024 and sell it today you would lose (269.00) from holding Deutsche Lufthansa AG or give up 27.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 32.43% |
| Values | Daily Returns |
Japan Post Holdings vs. Deutsche Lufthansa AG
Performance |
| Timeline |
| Japan Post Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Deutsche Lufthansa |
Japan Post and Deutsche Lufthansa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Post and Deutsche Lufthansa
The main advantage of trading using opposite Japan Post and Deutsche Lufthansa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Post position performs unexpectedly, Deutsche Lufthansa 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 Deutsche Lufthansa will offset losses from the drop in Deutsche Lufthansa's long position.| Japan Post vs. Huntington Bancshares Incorporated | Japan Post vs. Fifth Third Bancorp | Japan Post vs. MT Bank | Japan Post vs. Citizens Financial Group, |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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