Correlation Between Transportadora and Japan Post
Can any of the company-specific risk be diversified away by investing in both Transportadora and Japan Post 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 Transportadora and Japan Post into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transportadora de Gas and Japan Post Insurance, you can compare the effects of market volatilities on Transportadora and Japan Post 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 Transportadora with a short position of Japan Post. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transportadora and Japan Post.
Diversification Opportunities for Transportadora and Japan Post
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Transportadora and Japan is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Transportadora de Gas and Japan Post Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Post Insurance and Transportadora 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 Transportadora de Gas are associated (or correlated) with Japan Post. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Post Insurance has no effect on the direction of Transportadora i.e., Transportadora and Japan Post go up and down completely randomly.
Pair Corralation between Transportadora and Japan Post
Assuming the 90 days trading horizon Transportadora de Gas is expected to generate 1.87 times more return on investment than Japan Post. However, Transportadora is 1.87 times more volatile than Japan Post Insurance. It trades about 0.21 of its potential returns per unit of risk. Japan Post Insurance is currently generating about 0.1 per unit of risk. If you would invest 1,710 in Transportadora de Gas on August 31, 2024 and sell it today you would earn a total of 1,010 from holding Transportadora de Gas or generate 59.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transportadora de Gas vs. Japan Post Insurance
Performance |
| Timeline |
| Transportadora de Gas |
| Japan Post Insurance |
Transportadora and Japan Post Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transportadora and Japan Post
The main advantage of trading using opposite Transportadora and Japan Post positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transportadora position performs unexpectedly, Japan Post 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 Post will offset losses from the drop in Japan Post's long position.| Transportadora vs. Gladstone Investment | Transportadora vs. Games Workshop Group | Transportadora vs. MGIC INVESTMENT | Transportadora vs. HK Electric Investments |
| Japan Post vs. Pure Storage | Japan Post vs. BII Railway Transportation | Japan Post vs. Gaztransport Technigaz SA | Japan Post vs. Ming Le Sports |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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