Correlation Between Japan Medical and ARDAGH METAL

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

By analyzing existing cross correlation between Japan Medical Dynamic and ARDAGH METAL PACDL 0001, you can compare the effects of market volatilities on Japan Medical and ARDAGH METAL 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 Medical with a short position of ARDAGH METAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Medical and ARDAGH METAL.

Diversification Opportunities for Japan Medical and ARDAGH METAL

-0.57

Correlation Coefficient

Japan Medical  ARDAGH METAL

Excellent diversification

The 3 months correlation between Japan and ARDAGH is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Japan Medical Dynamic and ARDAGH METAL PACDL 0001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARDAGH METAL PACDL and Japan Medical 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 Medical Dynamic are associated (or correlated) with ARDAGH METAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARDAGH METAL PACDL has no effect on the direction of Japan Medical i.e., Japan Medical and ARDAGH METAL go up and down completely randomly.

Pair Corralation between Japan Medical and ARDAGH METAL

Assuming the 90 days horizon Japan Medical Dynamic is expected to under-perform the ARDAGH METAL. But the stock apears to be less risky and, when comparing its historical volatility, Japan Medical Dynamic is 2.33 times less risky than ARDAGH METAL. The stock trades about -0.21 of its potential returns per unit of risk. The ARDAGH METAL PACDL 0001 is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  320.00  in ARDAGH METAL PACDL 0001 on September 3, 2024 and sell it today you would earn a total of  20.00  from holding ARDAGH METAL PACDL 0001 or generate 6.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Japan Medical Dynamic  vs.  ARDAGH METAL PACDL 0001

Japan Medical Dynamic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Japan Medical Dynamic has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

ARDAGH METAL PACDL

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ARDAGH METAL PACDL 0001 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ARDAGH METAL may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Japan Medical and ARDAGH METAL

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

The idea behind Japan Medical Dynamic and ARDAGH METAL PACDL 0001 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.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.