Correlation Between JAPAN EX and SINGAPORE EXUNSPADR/15
Can any of the company-specific risk be diversified away by investing in both JAPAN EX and SINGAPORE EXUNSPADR/15 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 EX and SINGAPORE EXUNSPADR/15 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JAPAN EX UNADR and SINGAPORE EXUNSPADR15, you can compare the effects of market volatilities on JAPAN EX and SINGAPORE EXUNSPADR/15 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 EX with a short position of SINGAPORE EXUNSPADR/15. Check out your portfolio center. Please also check ongoing floating volatility patterns of JAPAN EX and SINGAPORE EXUNSPADR/15.
Diversification Opportunities for JAPAN EX and SINGAPORE EXUNSPADR/15
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between JAPAN and SINGAPORE is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding JAPAN EX UNADR and SINGAPORE EXUNSPADR15 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINGAPORE EXUNSPADR/15 and JAPAN EX 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 EX UNADR are associated (or correlated) with SINGAPORE EXUNSPADR/15. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SINGAPORE EXUNSPADR/15 has no effect on the direction of JAPAN EX i.e., JAPAN EX and SINGAPORE EXUNSPADR/15 go up and down completely randomly.
Pair Corralation between JAPAN EX and SINGAPORE EXUNSPADR/15
Assuming the 90 days trading horizon JAPAN EX is expected to generate 1.28 times less return on investment than SINGAPORE EXUNSPADR/15. In addition to that, JAPAN EX is 1.14 times more volatile than SINGAPORE EXUNSPADR15. It trades about 0.07 of its total potential returns per unit of risk. SINGAPORE EXUNSPADR15 is currently generating about 0.1 per unit of volatility. If you would invest 834.00 in SINGAPORE EXUNSPADR15 on November 2, 2024 and sell it today you would earn a total of 806.00 from holding SINGAPORE EXUNSPADR15 or generate 96.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
JAPAN EX UNADR vs. SINGAPORE EXUNSPADR15
Performance |
| Timeline |
| JAPAN EX UNADR |
| SINGAPORE EXUNSPADR/15 |
JAPAN EX and SINGAPORE EXUNSPADR/15 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JAPAN EX and SINGAPORE EXUNSPADR/15
The main advantage of trading using opposite JAPAN EX and SINGAPORE EXUNSPADR/15 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JAPAN EX position performs unexpectedly, SINGAPORE EXUNSPADR/15 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 SINGAPORE EXUNSPADR/15 will offset losses from the drop in SINGAPORE EXUNSPADR/15's long position.| JAPAN EX vs. Inspire Medical Systems | JAPAN EX vs. Yanzhou Coal Mining | JAPAN EX vs. Advanced Medical Solutions | JAPAN EX vs. Avanos Medical |
| SINGAPORE EXUNSPADR/15 vs. LONDON STEXUNSPADRS12 | SINGAPORE EXUNSPADR/15 vs. Nasdaq Inc | SINGAPORE EXUNSPADR/15 vs. Cboe Global Markets | SINGAPORE EXUNSPADR/15 vs. ASX LTD UNSPONSADR |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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