Correlation Between Japan Asia and EHEALTH
Can any of the company-specific risk be diversified away by investing in both Japan Asia and EHEALTH 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 Asia and EHEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Asia Investment and EHEALTH, you can compare the effects of market volatilities on Japan Asia and EHEALTH 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 Asia with a short position of EHEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Asia and EHEALTH.
Diversification Opportunities for Japan Asia and EHEALTH
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Japan and EHEALTH is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Japan Asia Investment and EHEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EHEALTH and Japan Asia 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 Asia Investment are associated (or correlated) with EHEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EHEALTH has no effect on the direction of Japan Asia i.e., Japan Asia and EHEALTH go up and down completely randomly.
Pair Corralation between Japan Asia and EHEALTH
Assuming the 90 days horizon Japan Asia Investment is expected to under-perform the EHEALTH. But the stock apears to be less risky and, when comparing its historical volatility, Japan Asia Investment is 2.59 times less risky than EHEALTH. The stock trades about -0.05 of its potential returns per unit of risk. The EHEALTH is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 342.00 in EHEALTH on September 15, 2024 and sell it today you would earn a total of 194.00 from holding EHEALTH or generate 56.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Japan Asia Investment vs. EHEALTH
Performance |
Timeline |
Japan Asia Investment |
EHEALTH |
Japan Asia and EHEALTH Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Japan Asia and EHEALTH
The main advantage of trading using opposite Japan Asia and EHEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Asia position performs unexpectedly, EHEALTH 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 EHEALTH will offset losses from the drop in EHEALTH's long position.Japan Asia vs. Meiko Electronics Co | Japan Asia vs. STMicroelectronics NV | Japan Asia vs. ARROW ELECTRONICS | Japan Asia vs. UET United Electronic |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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