Correlation Between Japan Airlines and Foremost Lithium

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

By analyzing existing cross correlation between Japan Airlines Ltd and Foremost Lithium Resource, you can compare the effects of market volatilities on Japan Airlines and Foremost Lithium 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 Airlines with a short position of Foremost Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Airlines and Foremost Lithium.

Diversification Opportunities for Japan Airlines and Foremost Lithium

0.0

Correlation Coefficient

Japan Airlines  Foremost Lithium

Pay attention - limited upside

The 3 months correlation between Japan and Foremost is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Japan Airlines Ltd and Foremost Lithium Resource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foremost Lithium Resource and Japan Airlines 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 Airlines Ltd are associated (or correlated) with Foremost Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foremost Lithium Resource has no effect on the direction of Japan Airlines i.e., Japan Airlines and Foremost Lithium go up and down completely randomly.

Pair Corralation between Japan Airlines and Foremost Lithium

If you would invest (100.00) in Japan Airlines Ltd on November 28, 2024 and sell it today you would earn a total of  100.00  from holding Japan Airlines Ltd or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Japan Airlines Ltd  vs.  Foremost Lithium Resource

Japan Airlines

Risk-Adjusted Performance

Very Weak

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

Foremost Lithium Resource

Risk-Adjusted Performance

Very Weak

Over the last 90 days Foremost Lithium Resource has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in March 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Japan Airlines and Foremost Lithium

The main advantage of trading using opposite Japan Airlines and Foremost Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Airlines position performs unexpectedly, Foremost Lithium 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 Foremost Lithium will offset losses from the drop in Foremost Lithium's long position.

The idea behind Japan Airlines Ltd and Foremost Lithium Resource 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.