Correlation Between Marubeni Corp and Jardine Matheson
Can any of the company-specific risk be diversified away by investing in both Marubeni Corp and Jardine Matheson 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 Marubeni Corp and Jardine Matheson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marubeni Corp ADR and Jardine Matheson Holdings, you can compare the effects of market volatilities on Marubeni Corp and Jardine Matheson 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 Marubeni Corp with a short position of Jardine Matheson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marubeni Corp and Jardine Matheson.
Diversification Opportunities for Marubeni Corp and Jardine Matheson
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Marubeni and Jardine is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Marubeni Corp ADR and Jardine Matheson Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jardine Matheson Holdings and Marubeni Corp 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 Marubeni Corp ADR are associated (or correlated) with Jardine Matheson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jardine Matheson Holdings has no effect on the direction of Marubeni Corp i.e., Marubeni Corp and Jardine Matheson go up and down completely randomly.
Pair Corralation between Marubeni Corp and Jardine Matheson
Assuming the 90 days horizon Marubeni Corp is expected to generate 499.25 times less return on investment than Jardine Matheson. In addition to that, Marubeni Corp is 1.34 times more volatile than Jardine Matheson Holdings. It trades about 0.0 of its total potential returns per unit of risk. Jardine Matheson Holdings is currently generating about 0.47 per unit of volatility. If you would invest 3,832 in Jardine Matheson Holdings on September 1, 2024 and sell it today you would earn a total of 505.00 from holding Jardine Matheson Holdings or generate 13.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marubeni Corp ADR vs. Jardine Matheson Holdings
Performance |
| Timeline |
| Marubeni Corp ADR |
| Jardine Matheson Holdings |
Marubeni Corp and Jardine Matheson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marubeni Corp and Jardine Matheson
The main advantage of trading using opposite Marubeni Corp and Jardine Matheson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marubeni Corp position performs unexpectedly, Jardine Matheson 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 Jardine Matheson will offset losses from the drop in Jardine Matheson's long position.The idea behind Marubeni Corp ADR and Jardine Matheson Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Jardine Matheson vs. Seychelle Environmtl | Jardine Matheson vs. Energy and Water | Jardine Matheson vs. One World Universe | Jardine Matheson vs. Vow ASA |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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