Correlation Between Tokyo Gas and Iwatani
Can any of the company-specific risk be diversified away by investing in both Tokyo Gas and Iwatani 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 Tokyo Gas and Iwatani into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tokyo Gas CoLtd and Iwatani, you can compare the effects of market volatilities on Tokyo Gas and Iwatani 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 Tokyo Gas with a short position of Iwatani. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tokyo Gas and Iwatani.
Diversification Opportunities for Tokyo Gas and Iwatani
Pay attention - limited upside
The 3 months correlation between Tokyo and Iwatani is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Tokyo Gas CoLtd and Iwatani in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iwatani and Tokyo Gas 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 Tokyo Gas CoLtd are associated (or correlated) with Iwatani. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iwatani has no effect on the direction of Tokyo Gas i.e., Tokyo Gas and Iwatani go up and down completely randomly.
Pair Corralation between Tokyo Gas and Iwatani
Assuming the 90 days horizon Tokyo Gas CoLtd is expected to generate 1.62 times more return on investment than Iwatani. However, Tokyo Gas is 1.62 times more volatile than Iwatani. It trades about 0.14 of its potential returns per unit of risk. Iwatani is currently generating about -0.2 per unit of risk. If you would invest 2,080 in Tokyo Gas CoLtd on September 24, 2024 and sell it today you would earn a total of 460.00 from holding Tokyo Gas CoLtd or generate 22.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Tokyo Gas CoLtd vs. Iwatani
Performance |
Timeline |
Tokyo Gas CoLtd |
Iwatani |
Tokyo Gas and Iwatani Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tokyo Gas and Iwatani
The main advantage of trading using opposite Tokyo Gas and Iwatani positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tokyo Gas position performs unexpectedly, Iwatani 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 Iwatani will offset losses from the drop in Iwatani's long position.Tokyo Gas vs. CenterPoint Energy | Tokyo Gas vs. Snam SpA | Tokyo Gas vs. Atmos Energy | Tokyo Gas vs. NiSource |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume |