Correlation Between JAPAN POST and Global Crossing
Can any of the company-specific risk be diversified away by investing in both JAPAN POST and Global Crossing 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 Global Crossing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JAPAN POST BANK and Global Crossing Airlines, you can compare the effects of market volatilities on JAPAN POST and Global Crossing 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 Global Crossing. Check out your portfolio center. Please also check ongoing floating volatility patterns of JAPAN POST and Global Crossing.
Diversification Opportunities for JAPAN POST and Global Crossing
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JAPAN and Global is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding JAPAN POST BANK and Global Crossing Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Crossing Airlines 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 BANK are associated (or correlated) with Global Crossing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Crossing Airlines has no effect on the direction of JAPAN POST i.e., JAPAN POST and Global Crossing go up and down completely randomly.
Pair Corralation between JAPAN POST and Global Crossing
Assuming the 90 days horizon JAPAN POST BANK is expected to generate 0.32 times more return on investment than Global Crossing. However, JAPAN POST BANK is 3.09 times less risky than Global Crossing. It trades about 0.05 of its potential returns per unit of risk. Global Crossing Airlines is currently generating about -0.01 per unit of risk. If you would invest 699.00 in JAPAN POST BANK on November 2, 2024 and sell it today you would earn a total of 246.00 from holding JAPAN POST BANK or generate 35.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JAPAN POST BANK vs. Global Crossing Airlines
Performance |
| Timeline |
| JAPAN POST BANK |
| Global Crossing Airlines |
JAPAN POST and Global Crossing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JAPAN POST and Global Crossing
The main advantage of trading using opposite JAPAN POST and Global Crossing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JAPAN POST position performs unexpectedly, Global Crossing 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 Global Crossing will offset losses from the drop in Global Crossing's long position.| JAPAN POST vs. Bankinter SA ADR | JAPAN POST vs. First Horizon | JAPAN POST vs. JAPAN POST BANK | JAPAN POST vs. CaixaBank SA |
| Global Crossing vs. Finnair Oyj | Global Crossing vs. easyJet plc | Global Crossing vs. Norse Atlantic ASA | Global Crossing vs. Air New Zealand |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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