Correlation Between SP Global and Japan Exchange
Can any of the company-specific risk be diversified away by investing in both SP Global and Japan Exchange 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 SP Global and Japan Exchange into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SP Global and Japan Exchange Group, you can compare the effects of market volatilities on SP Global and Japan Exchange 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 SP Global with a short position of Japan Exchange. Check out your portfolio center. Please also check ongoing floating volatility patterns of SP Global and Japan Exchange.
Diversification Opportunities for SP Global and Japan Exchange
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SPGI and Japan is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding SP Global and Japan Exchange Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Exchange Group and SP Global 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 SP Global are associated (or correlated) with Japan Exchange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Exchange Group has no effect on the direction of SP Global i.e., SP Global and Japan Exchange go up and down completely randomly.
Pair Corralation between SP Global and Japan Exchange
Given the investment horizon of 90 days SP Global is expected to generate 0.49 times more return on investment than Japan Exchange. However, SP Global is 2.06 times less risky than Japan Exchange. It trades about 0.11 of its potential returns per unit of risk. Japan Exchange Group is currently generating about -0.02 per unit of risk. If you would invest 42,670 in SP Global on August 27, 2024 and sell it today you would earn a total of 8,776 from holding SP Global or generate 20.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SP Global vs. Japan Exchange Group
Performance |
| Timeline |
| SP Global |
| Japan Exchange Group |
SP Global and Japan Exchange Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SP Global and Japan Exchange
The main advantage of trading using opposite SP Global and Japan Exchange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SP Global position performs unexpectedly, Japan Exchange 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 Exchange will offset losses from the drop in Japan Exchange's long position.| SP Global vs. Dun Bradstreet Holdings | SP Global vs. Moodys | SP Global vs. MSCI Inc | SP Global vs. Nasdaq Inc |
| Japan Exchange vs. Hong Kong Exchanges | Japan Exchange vs. Deutsche Boerse AG | Japan Exchange vs. SP Global | Japan Exchange vs. Moodys |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |