Correlation Between Japan Post and CD Projekt
Can any of the company-specific risk be diversified away by investing in both Japan Post and CD Projekt 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 CD Projekt 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 CD Projekt SA, you can compare the effects of market volatilities on Japan Post and CD Projekt 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 CD Projekt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Post and CD Projekt.
Diversification Opportunities for Japan Post and CD Projekt
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Japan and OTGLF is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Japan Post Holdings and CD Projekt SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CD Projekt SA 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 CD Projekt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CD Projekt SA has no effect on the direction of Japan Post i.e., Japan Post and CD Projekt go up and down completely randomly.
Pair Corralation between Japan Post and CD Projekt
Assuming the 90 days horizon Japan Post Holdings is expected to under-perform the CD Projekt. In addition to that, Japan Post is 23.99 times more volatile than CD Projekt SA. It trades about -0.13 of its total potential returns per unit of risk. CD Projekt SA is currently generating about 0.03 per unit of volatility. If you would invest 2,700 in CD Projekt SA on August 28, 2024 and sell it today you would earn a total of 803.00 from holding CD Projekt SA or generate 29.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 32.84% |
| Values | Daily Returns |
Japan Post Holdings vs. CD Projekt SA
Performance |
| Timeline |
| Japan Post Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CD Projekt SA |
Japan Post and CD Projekt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Post and CD Projekt
The main advantage of trading using opposite Japan Post and CD Projekt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Post position performs unexpectedly, CD Projekt 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 CD Projekt will offset losses from the drop in CD Projekt'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, |
| CD Projekt vs. Square Enix Holdings | CD Projekt vs. Sega Sammy Holdings | CD Projekt vs. Capcom Co Ltd | CD Projekt vs. Embracer Group AB |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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