Correlation Between Japan Post and Wesdome Gold
Can any of the company-specific risk be diversified away by investing in both Japan Post and Wesdome Gold 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 Wesdome Gold 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 Wesdome Gold Mines, you can compare the effects of market volatilities on Japan Post and Wesdome Gold 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 Wesdome Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Post and Wesdome Gold.
Diversification Opportunities for Japan Post and Wesdome Gold
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Japan and Wesdome is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Japan Post Holdings and Wesdome Gold Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesdome Gold Mines 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 Wesdome Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesdome Gold Mines has no effect on the direction of Japan Post i.e., Japan Post and Wesdome Gold go up and down completely randomly.
Pair Corralation between Japan Post and Wesdome Gold
Assuming the 90 days horizon Japan Post Holdings is expected to generate 1.46 times more return on investment than Wesdome Gold. However, Japan Post is 1.46 times more volatile than Wesdome Gold Mines. It trades about 0.17 of its potential returns per unit of risk. Wesdome Gold Mines is currently generating about 0.06 per unit of risk. If you would invest 760.00 in Japan Post Holdings on August 31, 2024 and sell it today you would earn a total of 276.00 from holding Japan Post Holdings or generate 36.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 13.64% |
| Values | Daily Returns |
Japan Post Holdings vs. Wesdome Gold Mines
Performance |
| Timeline |
| Japan Post Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Wesdome Gold Mines |
Japan Post and Wesdome Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Post and Wesdome Gold
The main advantage of trading using opposite Japan Post and Wesdome Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Post position performs unexpectedly, Wesdome Gold 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 Wesdome Gold will offset losses from the drop in Wesdome Gold'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, |
| Wesdome Gold vs. Victoria Gold Corp | Wesdome Gold vs. Cassiar Gold Corp | Wesdome Gold vs. Liberty Gold Corp | Wesdome Gold vs. I 80 Gold Corp |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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