Correlation Between FrontView REIT, and Japan Post

Can any of the company-specific risk be diversified away by investing in both FrontView REIT, 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 FrontView REIT, and Japan Post into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FrontView REIT, and Japan Post Holdings, you can compare the effects of market volatilities on FrontView REIT, 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 FrontView REIT, with a short position of Japan Post. Check out your portfolio center. Please also check ongoing floating volatility patterns of FrontView REIT, and Japan Post.

Diversification Opportunities for FrontView REIT, and Japan Post

0.05

Correlation Coefficient

FrontView REIT,  Japan Post

Significant diversification

The 3 months correlation between FrontView and Japan is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding FrontView REIT, and Japan Post Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Post Holdings and FrontView REIT, 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 FrontView REIT, 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 Holdings has no effect on the direction of FrontView REIT, i.e., FrontView REIT, and Japan Post go up and down completely randomly.

Pair Corralation between FrontView REIT, and Japan Post

Considering the 90-day investment horizon FrontView REIT, is expected to under-perform the Japan Post. But the stock apears to be less risky and, when comparing its historical volatility, FrontView REIT, is 1.07 times less risky than Japan Post. The stock trades about -0.08 of its potential returns per unit of risk. The Japan Post Holdings is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  1,031  in Japan Post Holdings on December 2, 2024 and sell it today you would lose (58.00) from holding Japan Post Holdings or give up 5.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

FrontView REIT,  vs.  Japan Post Holdings

FrontView REIT,

Risk-Adjusted Performance

Very Weak

Over the last 90 days FrontView REIT, has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Japan Post Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Japan Post Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical indicators, Japan Post is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with FrontView REIT, and Japan Post

The main advantage of trading using opposite FrontView REIT, and Japan Post positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FrontView REIT, 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.

The idea behind FrontView REIT, and Japan Post Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.