Correlation Between VIVA WINE and JAPAN AIRLINES
Can any of the company-specific risk be diversified away by investing in both VIVA WINE and JAPAN AIRLINES 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 VIVA WINE and JAPAN AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VIVA WINE GROUP and JAPAN AIRLINES, you can compare the effects of market volatilities on VIVA WINE and JAPAN AIRLINES 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 VIVA WINE with a short position of JAPAN AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIVA WINE and JAPAN AIRLINES.
Diversification Opportunities for VIVA WINE and JAPAN AIRLINES
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between VIVA and JAPAN is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding VIVA WINE GROUP and JAPAN AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAPAN AIRLINES and VIVA WINE 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 VIVA WINE GROUP are associated (or correlated) with JAPAN AIRLINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JAPAN AIRLINES has no effect on the direction of VIVA WINE i.e., VIVA WINE and JAPAN AIRLINES go up and down completely randomly.
Pair Corralation between VIVA WINE and JAPAN AIRLINES
Assuming the 90 days horizon VIVA WINE GROUP is expected to generate 1.65 times more return on investment than JAPAN AIRLINES. However, VIVA WINE is 1.65 times more volatile than JAPAN AIRLINES. It trades about -0.09 of its potential returns per unit of risk. JAPAN AIRLINES is currently generating about -0.41 per unit of risk. If you would invest 337.00 in VIVA WINE GROUP on October 11, 2024 and sell it today you would lose (9.00) from holding VIVA WINE GROUP or give up 2.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VIVA WINE GROUP vs. JAPAN AIRLINES
Performance |
| Timeline |
| VIVA WINE GROUP |
| JAPAN AIRLINES |
VIVA WINE and JAPAN AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VIVA WINE and JAPAN AIRLINES
The main advantage of trading using opposite VIVA WINE and JAPAN AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIVA WINE position performs unexpectedly, JAPAN AIRLINES 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 JAPAN AIRLINES will offset losses from the drop in JAPAN AIRLINES's long position.| VIVA WINE vs. Elmos Semiconductor SE | VIVA WINE vs. Taiwan Semiconductor Manufacturing | VIVA WINE vs. Semiconductor Manufacturing International | VIVA WINE vs. Alfa Financial Software |
| JAPAN AIRLINES vs. National Beverage Corp | JAPAN AIRLINES vs. INDOFOOD AGRI RES | JAPAN AIRLINES vs. GRIFFIN MINING LTD | JAPAN AIRLINES vs. VIVA WINE 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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