Correlation Between Japan 2x and NYSE Composite
Can any of the company-specific risk be diversified away by investing in both Japan 2x and NYSE Composite 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 2x and NYSE Composite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan 2x Strategy and NYSE Composite, you can compare the effects of market volatilities on Japan 2x and NYSE Composite 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 2x with a short position of NYSE Composite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan 2x and NYSE Composite.
Diversification Opportunities for Japan 2x and NYSE Composite
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Japan and NYSE is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Japan 2x Strategy and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite and Japan 2x 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 2x Strategy are associated (or correlated) with NYSE Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE Composite has no effect on the direction of Japan 2x i.e., Japan 2x and NYSE Composite go up and down completely randomly.
Pair Corralation between Japan 2x and NYSE Composite
Assuming the 90 days horizon Japan 2x Strategy is expected to under-perform the NYSE Composite. In addition to that, Japan 2x is 3.65 times more volatile than NYSE Composite. It trades about -0.14 of its total potential returns per unit of risk. NYSE Composite is currently generating about 0.05 per unit of volatility. If you would invest 1,756,661 in NYSE Composite on January 25, 2024 and sell it today you would earn a total of 22,615 from holding NYSE Composite or generate 1.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Japan 2x Strategy vs. NYSE Composite
Performance |
Timeline |
Japan 2x and NYSE Composite Volatility Contrast
Predicted Return Density |
Returns |
Japan 2x Strategy
Pair trading matchups for Japan 2x
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with Japan 2x and NYSE Composite
The main advantage of trading using opposite Japan 2x and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan 2x position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position.Japan 2x vs. Rational Inflation Growth | Japan 2x vs. Goldman Sachs Inflation | Japan 2x vs. Fidelity Sai Inflationfocused | Japan 2x vs. Schwab Treasury Inflation |
NYSE Composite vs. Aduro Clean Technologies | NYSE Composite vs. Transphorm Technology | NYSE Composite vs. Advanced Micro Devices | NYSE Composite vs. IPG Photonics |
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.
Other Complementary Tools
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |