Correlation Between Japan Post and AMAG Austria
Can any of the company-specific risk be diversified away by investing in both Japan Post and AMAG Austria 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 Post and AMAG Austria into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Post Insurance and AMAG Austria Metall, you can compare the effects of market volatilities on Japan Post and AMAG Austria 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 Post with a short position of AMAG Austria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Post and AMAG Austria.
Diversification Opportunities for Japan Post and AMAG Austria
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Japan and AMAG is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Japan Post Insurance and AMAG Austria Metall in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMAG Austria Metall and Japan Post 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 Post Insurance are associated (or correlated) with AMAG Austria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMAG Austria Metall has no effect on the direction of Japan Post i.e., Japan Post and AMAG Austria go up and down completely randomly.
Pair Corralation between Japan Post and AMAG Austria
Assuming the 90 days trading horizon Japan Post Insurance is expected to under-perform the AMAG Austria. In addition to that, Japan Post is 1.76 times more volatile than AMAG Austria Metall. It trades about -0.41 of its total potential returns per unit of risk. AMAG Austria Metall is currently generating about 0.03 per unit of volatility. If you would invest 2,390 in AMAG Austria Metall on October 6, 2024 and sell it today you would earn a total of 10.00 from holding AMAG Austria Metall or generate 0.42% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Japan Post Insurance vs. AMAG Austria Metall
Performance |
Timeline |
Japan Post Insurance |
AMAG Austria Metall |
Japan Post and AMAG Austria Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Japan Post and AMAG Austria
The main advantage of trading using opposite Japan Post and AMAG Austria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Post position performs unexpectedly, AMAG Austria 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 AMAG Austria will offset losses from the drop in AMAG Austria's long position.Japan Post vs. Nok Airlines PCL | Japan Post vs. LANDSEA GREEN MANAGEMENT | Japan Post vs. Corporate Travel Management | Japan Post vs. VIAPLAY GROUP AB |
AMAG Austria vs. TOREX SEMICONDUCTOR LTD | AMAG Austria vs. DEVRY EDUCATION GRP | AMAG Austria vs. Perseus Mining Limited | AMAG Austria vs. Forsys Metals Corp |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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