'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

ja research

ja research is an independent research platform focused exclusively on Japanese equities. Leveraging data and graphic analysis provided by Japan Analytics, we provide insights on small and medium-sized companies that have been ignored by the sell-side as well as challenging conventional wisdom on larger companies. We also offer analyst and corporate access, the latter with translation if required. 

Quantitative Analysis

RELATIVE PRICE SCORE - The Relative Price Score (RPS) was introduced in an <a href="https://www.smartkarma.com/insights/japan-most-overbought-most-oversold-the-relative-price-score" target="_blank" data-smartkarma-citation="insights:21149">earlier</a> insight and is a measure of stock price performance relative to TOPIX calculated by comparing the current deviation with the mean absolute deviation of monthly and daily relative share prices. As all companies are on a comparable scale, 'Overbought' and 'Oversold' outliers and changes in scoring can reveal short-term and longer-term trading opportunities. Company data is cap-weight-aggregated into 328 Peer Group and 30 Sector Relative Price Scores. Outlier thresholds are set at +4 &amp; -2 for Companies, +3 &amp; -1.5 for Peer Groups and +2 and -1 for Sectors. These thresholds equate with the top and bottom first-to-second percentiles of historical observations from which mean reversion normally takes a matter of months.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/068/886/original/2018-11-06_18-48-56.png?1541497764" class="editor-image img-responsive" data-smartkarma-image-id="68886"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/068/887/original/2018-11-06_18-49-10.png?1541497783" class="editor-image img-responsive" data-smartkarma-image-id="68887"></figure><div class="content-caption">Source: Japan Analytics</div>OUTLIERS ON THE RISE - MORE VOLATILITY AHEAD - In the past, increases in the percentage of companies that are either Overbought or Oversold has been a useful indicator of market trends with a rising number of Overbought outliers being bullish and an increasing number of Oversold outliers being bearish. The current situation where both sets of outliers are rising has only occurred once before in the last 30 years - in 1999/2000 shortly before the peak of the 'tech bubble'. We attribute some of the current market distortions to the Bank of Japan's market activities, however, with both outlier ratios now at 27-year highs, more volatility is the most natural outcome to forecast.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/068/856/original/2018-11-06_11-12-19.png?1541470386" class="editor-image img-responsive" data-smartkarma-image-id="68856"></figure><div class="content-caption">Source: Japan Analytics</div>SECTOR RELATIVE PRICE SCORES - Currently, only the Healthcare sector is 'Overbought' and has been so since early October. The Commercial Services and Consumer Services sectors have both fallen back over the last two months having underperformed the market by 3.9% and 3.7%, respectively. Banks and Utilities remain 'Oversold', but have outperformed by 4.4% and 6.0% since 6th September. <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/068/992/original/2018-11-07_11-31-27.png?1541557907" class="editor-image img-responsive" data-smartkarma-image-id="68992"></figure>OVERBOUGHT PEER GROUPS - Currently, twelve Peer Groups are 'overbought' down from seventeen in September.  Five Peer Groups are no longer Overbought - IT Systems-Financial, Software-Development Services, Amusement Parks &amp; Arcades, Retail - Home Furnishing and Employment &amp; Staffing Services. There are no newly-Overbought Peer Groups. Online Payment Services and Measuring Instruments say the most significant declines in RPS, while Musical Instruments, Sensors, and Management Consulting Services all rose.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/068/947/original/2018-11-07_08-27-00.png?1541546929" class="editor-image img-responsive" data-smartkarma-image-id="68947"></figure>OVERSOLD PEER GROUPS - Currently, ten Peer Groups are 'Oversold' - the same number as in September. Industrial REITs are no longer on the list, while Shikoku Regional Banks have been added. Except for Kansai, Kyushu, and Okinawa, all Regional Bank Peer Groups are now Oversold although three of the groups - Hokkaido/Tohoku, Chubu, and Shikoku are seeing rising Results/Revision Scores. (Chugoku Regional Banks' two-month market capitalisation increase is partly due to the listing of <a href="https://www.smartkarma.com/entities/27533" target="_blank" data-smartkarma-citation="entities:27533:1">Daishi Hokuetsu Financial Group (7327 JP)</a> .)

RELATIVE PRICE SCORE - The Relative Price Score (RPS) was introduced in an earlier insight and is a measure of stock price performance relative to TOPIX calculated by comparing the current deviation with the mean absolute deviation of monthly and daily relative share prices. As all companies are on a comparable scale, 'Overbought' and 'Oversold' outliers and changes in scoring can reveal short-term and longer-term trading opportunities. Company data is cap-weight-aggregated into 328 Peer Group and 30 Sector Relative Price Scores. Outlier thresholds are set at +4 &amp; -2 for Companies, +3 &amp; -1.5 for Peer Groups and +2 and -1 for Sectors. These thresholds equate with the top and bottom first-to-second percentiles of historical observations from which mean reversion normally takes a matter of months.Source: Japan AnalyticsOUTLIERS ON THE RISE - MORE VOLATILITY AHEAD - In the past, increases in the percentage of companies that are either Overbought or Oversold has been a useful indicator of market trends with a rising number of Overbought outliers being bullish and an increasing number of Oversold outliers being bearish. The current situation where both sets of outliers are rising has only occurred once before in the last 30 years - in 1999/2000 shortly before the peak of the 'tech bubble'. We attribute some of the current market distortions to the Bank of Japan's market activities, however, with both outlier ratios now at 27-year highs, more volatility is the most natural outcome to forecast.Source: Japan AnalyticsSECTOR RELATIVE PRICE SCORES - Currently, only the Healthcare sector is 'Overbought' and has been so since early October. The Commercial Services and Consumer Services sectors have both fallen back over the last two months having underperformed the market by 3.9% and 3.7%, respectively. Banks and Utilities remain 'Oversold', but have outperformed by 4.4% and 6.0% since 6th September. OVERBOUGHT PEER GROUPS - Currently, twelve Peer Groups are 'overbought' down from seventeen in September.  Five Peer Groups are no longer Overbought - IT Systems-Financial, Software-Development Services, Amusement Parks &amp; Arcades, Retail - Home Furnishing and Employment &amp; Staffing Services. There are no newly-Overbought Peer Groups. Online Payment Services and Measuring Instruments say the most significant declines in RPS, while Musical Instruments, Sensors, and Management Consulting Services all rose.OVERSOLD PEER GROUPS - Currently, ten Peer Groups are 'Oversold' - the same number as in September. Industrial REITs are no longer on the list, while Shikoku Regional Banks have been added. Except for Kansai, Kyushu, and Okinawa, all Regional Bank Peer Groups are now Oversold although three of the groups - Hokkaido/Tohoku, Chubu, and Shikoku are seeing rising Results/Revision Scores. (Chugoku Regional Banks' two-month market capitalisation increase is partly due to the listing of Daishi Hokuetsu Financial Group (7327 JP) .)

Japan: Relative Price Score Update - Overbought and Oversold Sectors & Peer Groups

Japan

RIKEN KEIKI CO., LTD. manufactures and markets industrial gas detectors and gas measuring equipment.  The Company also makes environmental pollution measuring equipment and radioactive rays detection equipment.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Riken Keiki (7734 JP)

Japan: Relative Price Score Update - Overbought and Oversold Sectors & Peer Groups

RELATIVE PRICE SCORE - The Relative Price Score (RPS) was introduced in an earlier insight and is a measure of stock price performance relative to...

Campbell Gunn

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)