Correlation Between MITSUBISHI STEEL and COSMOSTEEL HLDGS
Can any of the company-specific risk be diversified away by investing in both MITSUBISHI STEEL and COSMOSTEEL HLDGS 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 MITSUBISHI STEEL and COSMOSTEEL HLDGS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MITSUBISHI STEEL MFG and COSMOSTEEL HLDGS, you can compare the effects of market volatilities on MITSUBISHI STEEL and COSMOSTEEL HLDGS 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 MITSUBISHI STEEL with a short position of COSMOSTEEL HLDGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of MITSUBISHI STEEL and COSMOSTEEL HLDGS.
Diversification Opportunities for MITSUBISHI STEEL and COSMOSTEEL HLDGS
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MITSUBISHI and COSMOSTEEL is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding MITSUBISHI STEEL MFG and COSMOSTEEL HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSMOSTEEL HLDGS and MITSUBISHI STEEL 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 MITSUBISHI STEEL MFG are associated (or correlated) with COSMOSTEEL HLDGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSMOSTEEL HLDGS has no effect on the direction of MITSUBISHI STEEL i.e., MITSUBISHI STEEL and COSMOSTEEL HLDGS go up and down completely randomly.
Pair Corralation between MITSUBISHI STEEL and COSMOSTEEL HLDGS
Assuming the 90 days horizon MITSUBISHI STEEL MFG is expected to under-perform the COSMOSTEEL HLDGS. But the stock apears to be less risky and, when comparing its historical volatility, MITSUBISHI STEEL MFG is 1.1 times less risky than COSMOSTEEL HLDGS. The stock trades about -0.01 of its potential returns per unit of risk. The COSMOSTEEL HLDGS is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 6.50 in COSMOSTEEL HLDGS on August 31, 2024 and sell it today you would lose (0.25) from holding COSMOSTEEL HLDGS or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MITSUBISHI STEEL MFG vs. COSMOSTEEL HLDGS
Performance |
| Timeline |
| MITSUBISHI STEEL MFG |
| COSMOSTEEL HLDGS |
MITSUBISHI STEEL and COSMOSTEEL HLDGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MITSUBISHI STEEL and COSMOSTEEL HLDGS
The main advantage of trading using opposite MITSUBISHI STEEL and COSMOSTEEL HLDGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MITSUBISHI STEEL position performs unexpectedly, COSMOSTEEL HLDGS 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 COSMOSTEEL HLDGS will offset losses from the drop in COSMOSTEEL HLDGS's long position.| MITSUBISHI STEEL vs. Apple Inc | MITSUBISHI STEEL vs. Apple Inc | MITSUBISHI STEEL vs. Apple Inc | MITSUBISHI STEEL vs. Apple Inc |
| COSMOSTEEL HLDGS vs. Broadcom | COSMOSTEEL HLDGS vs. TITANIUM TRANSPORTGROUP | COSMOSTEEL HLDGS vs. Fukuyama Transporting Co | COSMOSTEEL HLDGS vs. Sims Metal Management |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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