Correlation Between JAPAN POST and Palfinger
Can any of the company-specific risk be diversified away by investing in both JAPAN POST and Palfinger 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 Palfinger 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 Palfinger AG, you can compare the effects of market volatilities on JAPAN POST and Palfinger 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 Palfinger. Check out your portfolio center. Please also check ongoing floating volatility patterns of JAPAN POST and Palfinger.
Diversification Opportunities for JAPAN POST and Palfinger
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JAPAN and Palfinger is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding JAPAN POST BANK and Palfinger AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palfinger AG 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 Palfinger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palfinger AG has no effect on the direction of JAPAN POST i.e., JAPAN POST and Palfinger go up and down completely randomly.
Pair Corralation between JAPAN POST and Palfinger
Assuming the 90 days horizon JAPAN POST BANK is expected to generate 1.15 times more return on investment than Palfinger. However, JAPAN POST is 1.15 times more volatile than Palfinger AG. It trades about 0.02 of its potential returns per unit of risk. Palfinger AG is currently generating about 0.01 per unit of risk. If you would invest 955.00 in JAPAN POST BANK on September 1, 2024 and sell it today you would earn a total of 26.00 from holding JAPAN POST BANK or generate 2.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
JAPAN POST BANK vs. Palfinger AG
Performance |
| Timeline |
| JAPAN POST BANK |
| Palfinger AG |
JAPAN POST and Palfinger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JAPAN POST and Palfinger
The main advantage of trading using opposite JAPAN POST and Palfinger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JAPAN POST position performs unexpectedly, Palfinger 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 Palfinger will offset losses from the drop in Palfinger'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 |
| Palfinger vs. American Premium Water | Palfinger vs. Arts Way Manufacturing Co | Palfinger vs. Astec Industries | Palfinger vs. Alamo Group |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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