Correlation Between MITSUBISHI STEEL and LION ONE
Can any of the company-specific risk be diversified away by investing in both MITSUBISHI STEEL and LION 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 MITSUBISHI STEEL and LION ONE 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 LION ONE METALS, you can compare the effects of market volatilities on MITSUBISHI STEEL and LION 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 MITSUBISHI STEEL with a short position of LION ONE. Check out your portfolio center. Please also check ongoing floating volatility patterns of MITSUBISHI STEEL and LION ONE.
Diversification Opportunities for MITSUBISHI STEEL and LION ONE
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MITSUBISHI and LION is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding MITSUBISHI STEEL MFG and LION ONE METALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LION ONE METALS 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 LION ONE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LION ONE METALS has no effect on the direction of MITSUBISHI STEEL i.e., MITSUBISHI STEEL and LION ONE go up and down completely randomly.
Pair Corralation between MITSUBISHI STEEL and LION ONE
Assuming the 90 days horizon MITSUBISHI STEEL MFG is expected to generate 0.57 times more return on investment than LION ONE. However, MITSUBISHI STEEL MFG is 1.77 times less risky than LION ONE. It trades about 0.03 of its potential returns per unit of risk. LION ONE METALS is currently generating about -0.04 per unit of risk. If you would invest 704.00 in MITSUBISHI STEEL MFG on September 3, 2024 and sell it today you would earn a total of 161.00 from holding MITSUBISHI STEEL MFG or generate 22.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MITSUBISHI STEEL MFG vs. LION ONE METALS
Performance |
| Timeline |
| MITSUBISHI STEEL MFG |
| LION ONE METALS |
MITSUBISHI STEEL and LION ONE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MITSUBISHI STEEL and LION ONE
The main advantage of trading using opposite MITSUBISHI STEEL and LION ONE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MITSUBISHI STEEL position performs unexpectedly, LION 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 LION ONE will offset losses from the drop in LION ONE's long position.| MITSUBISHI STEEL vs. Apple Inc | MITSUBISHI STEEL vs. Apple Inc | MITSUBISHI STEEL vs. Apple Inc | MITSUBISHI STEEL vs. Apple Inc |
| LION ONE vs. HomeToGo SE | LION ONE vs. NORTHEAST UTILITIES | LION ONE vs. SBM OFFSHORE | LION ONE vs. Zijin Mining Group |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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