Correlation Between Japan Medical and MIRAIT ONE

Can any of the company-specific risk be diversified away by investing in both Japan Medical and MIRAIT ONE 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 MIRAIT ONE 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 MIRAIT ONE P, you can compare the effects of market volatilities on Japan Medical and MIRAIT ONE 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 MIRAIT ONE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Medical and MIRAIT ONE.

Diversification Opportunities for Japan Medical and MIRAIT ONE

0.16

Correlation Coefficient

Japan Medical  MIRAIT ONE

Average diversification

The 3 months correlation between Japan and MIRAIT is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Japan Medical Dynamic and MIRAIT ONE P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MIRAIT ONE P 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 MIRAIT ONE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MIRAIT ONE P has no effect on the direction of Japan Medical i.e., Japan Medical and MIRAIT ONE go up and down completely randomly.

Pair Corralation between Japan Medical and MIRAIT ONE

Assuming the 90 days horizon Japan Medical Dynamic is expected to under-perform the MIRAIT ONE. In addition to that, Japan Medical is 1.18 times more volatile than MIRAIT ONE P. It trades about -0.03 of its total potential returns per unit of risk. MIRAIT ONE P is currently generating about 0.05 per unit of volatility. If you would invest  1,146  in MIRAIT ONE P on March 29, 2025 and sell it today you would earn a total of  304.00  from holding MIRAIT ONE P or generate 26.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Japan Medical Dynamic  vs.  MIRAIT ONE P

Japan Medical Dynamic

Risk-Adjusted Performance

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 nearly stable basic indicators, Japan Medical is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

MIRAIT ONE P

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MIRAIT ONE P are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, MIRAIT ONE may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Pair Trading with Japan Medical and MIRAIT ONE

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

The idea behind Japan Medical Dynamic and MIRAIT ONE P 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.

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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.