Correlation Between HOSPITALITY and Japan Tobacco
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By analyzing existing cross correlation between HOSPITALITY PPTYS TR and Japan Tobacco ADR, you can compare the effects of market volatilities on HOSPITALITY and Japan Tobacco 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 HOSPITALITY with a short position of Japan Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of HOSPITALITY and Japan Tobacco.
Diversification Opportunities for HOSPITALITY and Japan Tobacco
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HOSPITALITY and Japan is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding HOSPITALITY PPTYS TR and Japan Tobacco ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Tobacco ADR and HOSPITALITY 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 HOSPITALITY PPTYS TR are associated (or correlated) with Japan Tobacco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Tobacco ADR has no effect on the direction of HOSPITALITY i.e., HOSPITALITY and Japan Tobacco go up and down completely randomly.
Pair Corralation between HOSPITALITY and Japan Tobacco
Assuming the 90 days trading horizon HOSPITALITY PPTYS TR is expected to generate 1.14 times more return on investment than Japan Tobacco. However, HOSPITALITY is 1.14 times more volatile than Japan Tobacco ADR. It trades about 0.12 of its potential returns per unit of risk. Japan Tobacco ADR is currently generating about -0.06 per unit of risk. If you would invest 7,225 in HOSPITALITY PPTYS TR on September 12, 2024 and sell it today you would earn a total of 630.00 from holding HOSPITALITY PPTYS TR or generate 8.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.83% |
| Values | Daily Returns |
HOSPITALITY PPTYS TR vs. Japan Tobacco ADR
Performance |
| Timeline |
| HOSPITALITY PPTYS |
| Japan Tobacco ADR |
HOSPITALITY and Japan Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HOSPITALITY and Japan Tobacco
The main advantage of trading using opposite HOSPITALITY and Japan Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HOSPITALITY position performs unexpectedly, Japan Tobacco 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 Tobacco will offset losses from the drop in Japan Tobacco's long position.| HOSPITALITY vs. Entravision Communications | HOSPITALITY vs. Xunlei Ltd Adr | HOSPITALITY vs. SmartStop Self Storage | HOSPITALITY vs. FiscalNote Holdings |
| Japan Tobacco vs. British American Tobacco | Japan Tobacco vs. Imperial Brands PLC | Japan Tobacco vs. RLX Technology | Japan Tobacco vs. British American Tobacco |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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