Correlation Between Japan Airlines and Western Asset
Can any of the company-specific risk be diversified away by investing in both Japan Airlines and Western Asset 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 Airlines and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Airlines Ltd and Western Asset Investment, you can compare the effects of market volatilities on Japan Airlines and Western Asset 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 Airlines with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Airlines and Western Asset.
Diversification Opportunities for Japan Airlines and Western Asset
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Japan and Western is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Japan Airlines Ltd and Western Asset Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Investment and Japan Airlines 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 Airlines Ltd are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Investment has no effect on the direction of Japan Airlines i.e., Japan Airlines and Western Asset go up and down completely randomly.
Pair Corralation between Japan Airlines and Western Asset
Assuming the 90 days horizon Japan Airlines Ltd is expected to under-perform the Western Asset. In addition to that, Japan Airlines is 4.09 times more volatile than Western Asset Investment. It trades about -0.16 of its total potential returns per unit of risk. Western Asset Investment is currently generating about -0.06 per unit of volatility. If you would invest 1,665 in Western Asset Investment on September 11, 2025 and sell it today you would lose (23.00) from holding Western Asset Investment or give up 1.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Airlines Ltd vs. Western Asset Investment
Performance |
| Timeline |
| Japan Airlines |
| Western Asset Investment |
Japan Airlines and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Airlines and Western Asset
The main advantage of trading using opposite Japan Airlines and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Airlines position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Japan Airlines vs. Nok Airlines Public | Japan Airlines vs. Harbor Diversified | Japan Airlines vs. Global Crossing Airlines | Japan Airlines vs. YTO Express Holdings |
| Western Asset vs. Western Asset Global | Western Asset vs. Amg Managers Special | Western Asset vs. Amg Managers Special | Western Asset vs. Platinum Asia Investments |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| 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 | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |