Correlation Between JAPAN POST and L Catterton
Can any of the company-specific risk be diversified away by investing in both JAPAN POST and L Catterton 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 L Catterton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JAPAN POST BANK and L Catterton Asia, you can compare the effects of market volatilities on JAPAN POST and L Catterton 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 L Catterton. Check out your portfolio center. Please also check ongoing floating volatility patterns of JAPAN POST and L Catterton.
Diversification Opportunities for JAPAN POST and L Catterton
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JAPAN and LCAAU is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding JAPAN POST BANK and L Catterton Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on L Catterton Asia 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 BANK are associated (or correlated) with L Catterton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of L Catterton Asia has no effect on the direction of JAPAN POST i.e., JAPAN POST and L Catterton go up and down completely randomly.
Pair Corralation between JAPAN POST and L Catterton
If you would invest 909.00 in JAPAN POST BANK on September 26, 2024 and sell it today you would earn a total of 11.00 from holding JAPAN POST BANK or generate 1.21% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 1.59% |
Values | Daily Returns |
JAPAN POST BANK vs. L Catterton Asia
Performance |
Timeline |
JAPAN POST BANK |
L Catterton Asia |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
JAPAN POST and L Catterton Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with JAPAN POST and L Catterton
The main advantage of trading using opposite JAPAN POST and L Catterton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JAPAN POST position performs unexpectedly, L Catterton 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 L Catterton will offset losses from the drop in L Catterton's long position.JAPAN POST vs. Banco Bradesco SA | ||
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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