Correlation Between Japan Exchange and XL Axiata
Can any of the company-specific risk be diversified away by investing in both Japan Exchange and XL Axiata 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 Exchange and XL Axiata into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Exchange Group and XL Axiata Tbk, you can compare the effects of market volatilities on Japan Exchange and XL Axiata 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 Exchange with a short position of XL Axiata. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Exchange and XL Axiata.
Diversification Opportunities for Japan Exchange and XL Axiata
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Japan and PTXKY is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Japan Exchange Group and XL Axiata Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XL Axiata Tbk and Japan Exchange 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 Exchange Group are associated (or correlated) with XL Axiata. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XL Axiata Tbk has no effect on the direction of Japan Exchange i.e., Japan Exchange and XL Axiata go up and down completely randomly.
Pair Corralation between Japan Exchange and XL Axiata
Assuming the 90 days horizon Japan Exchange Group is expected to generate 0.4 times more return on investment than XL Axiata. However, Japan Exchange Group is 2.48 times less risky than XL Axiata. It trades about 0.06 of its potential returns per unit of risk. XL Axiata Tbk is currently generating about 0.03 per unit of risk. If you would invest 795.00 in Japan Exchange Group on August 27, 2024 and sell it today you would earn a total of 365.00 from holding Japan Exchange Group or generate 45.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.49% |
| Values | Daily Returns |
Japan Exchange Group vs. XL Axiata Tbk
Performance |
| Timeline |
| Japan Exchange Group |
| XL Axiata Tbk |
Japan Exchange and XL Axiata Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Exchange and XL Axiata
The main advantage of trading using opposite Japan Exchange and XL Axiata positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Exchange position performs unexpectedly, XL Axiata 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 XL Axiata will offset losses from the drop in XL Axiata's long position.| Japan Exchange vs. Hong Kong Exchanges | Japan Exchange vs. Deutsche Boerse AG | Japan Exchange vs. SP Global | Japan Exchange vs. Moodys |
| XL Axiata vs. Vodafone Group PLC | XL Axiata vs. KDDI Corp | XL Axiata vs. Amrica Mvil, SAB | XL Axiata vs. Singapore Telecommunications Limited |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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