Correlation Between JAPAN TOBACCO and WuXi AppTec
Can any of the company-specific risk be diversified away by investing in both JAPAN TOBACCO and WuXi AppTec 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 TOBACCO and WuXi AppTec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JAPAN TOBACCO UNSPADR12 and WuXi AppTec Co, you can compare the effects of market volatilities on JAPAN TOBACCO and WuXi AppTec 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 TOBACCO with a short position of WuXi AppTec. Check out your portfolio center. Please also check ongoing floating volatility patterns of JAPAN TOBACCO and WuXi AppTec.
Diversification Opportunities for JAPAN TOBACCO and WuXi AppTec
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between JAPAN and WuXi is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding JAPAN TOBACCO UNSPADR12 and WuXi AppTec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WuXi AppTec and JAPAN TOBACCO 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 TOBACCO UNSPADR12 are associated (or correlated) with WuXi AppTec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WuXi AppTec has no effect on the direction of JAPAN TOBACCO i.e., JAPAN TOBACCO and WuXi AppTec go up and down completely randomly.
Pair Corralation between JAPAN TOBACCO and WuXi AppTec
Assuming the 90 days trading horizon JAPAN TOBACCO is expected to generate 4.78 times less return on investment than WuXi AppTec. But when comparing it to its historical volatility, JAPAN TOBACCO UNSPADR12 is 3.21 times less risky than WuXi AppTec. It trades about 0.06 of its potential returns per unit of risk. WuXi AppTec Co is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 685.00 in WuXi AppTec Co on December 28, 2024 and sell it today you would earn a total of 130.00 from holding WuXi AppTec Co or generate 18.98% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
JAPAN TOBACCO UNSPADR12 vs. WuXi AppTec Co
Performance |
Timeline |
JAPAN TOBACCO UNSPADR12 |
WuXi AppTec |
JAPAN TOBACCO and WuXi AppTec Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with JAPAN TOBACCO and WuXi AppTec
The main advantage of trading using opposite JAPAN TOBACCO and WuXi AppTec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JAPAN TOBACCO position performs unexpectedly, WuXi AppTec 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 WuXi AppTec will offset losses from the drop in WuXi AppTec's long position.JAPAN TOBACCO vs. SUN ART RETAIL | JAPAN TOBACCO vs. Retail Estates NV | JAPAN TOBACCO vs. TRADELINK ELECTRON | JAPAN TOBACCO vs. National Retail Properties |
WuXi AppTec vs. Zurich Insurance Group | WuXi AppTec vs. Hanison Construction Holdings | WuXi AppTec vs. Universal Insurance Holdings | WuXi AppTec vs. The Hanover Insurance |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum |