Correlation Between Panasonic Corp and UPM Kymmene
Can any of the company-specific risk be diversified away by investing in both Panasonic Corp and UPM Kymmene 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 Panasonic Corp and UPM Kymmene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Panasonic Corp and UPM Kymmene Oyj, you can compare the effects of market volatilities on Panasonic Corp and UPM Kymmene 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 Panasonic Corp with a short position of UPM Kymmene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panasonic Corp and UPM Kymmene.
Diversification Opportunities for Panasonic Corp and UPM Kymmene
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Panasonic and UPM is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Panasonic Corp and UPM Kymmene Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UPM Kymmene Oyj and Panasonic Corp 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 Panasonic Corp are associated (or correlated) with UPM Kymmene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UPM Kymmene Oyj has no effect on the direction of Panasonic Corp i.e., Panasonic Corp and UPM Kymmene go up and down completely randomly.
Pair Corralation between Panasonic Corp and UPM Kymmene
Assuming the 90 days trading horizon Panasonic Corp is expected to generate 1.78 times more return on investment than UPM Kymmene. However, Panasonic Corp is 1.78 times more volatile than UPM Kymmene Oyj. It trades about 0.05 of its potential returns per unit of risk. UPM Kymmene Oyj is currently generating about -0.05 per unit of risk. If you would invest 138,168 in Panasonic Corp on August 27, 2024 and sell it today you would earn a total of 16,932 from holding Panasonic Corp or generate 12.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 79.26% |
| Values | Daily Returns |
Panasonic Corp vs. UPM Kymmene Oyj
Performance |
| Timeline |
| Panasonic Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Strong
| UPM Kymmene Oyj |
Panasonic Corp and UPM Kymmene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Panasonic Corp and UPM Kymmene
The main advantage of trading using opposite Panasonic Corp and UPM Kymmene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Panasonic Corp position performs unexpectedly, UPM Kymmene 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 UPM Kymmene will offset losses from the drop in UPM Kymmene's long position.| Panasonic Corp vs. Automatic Data Processing | Panasonic Corp vs. Medical Properties Trust | Panasonic Corp vs. Futura Medical | Panasonic Corp vs. Fresenius Medical Care |
| UPM Kymmene vs. Samsung Electronics Co | UPM Kymmene vs. Samsung Electronics Co | UPM Kymmene vs. Hyundai Motor | UPM Kymmene vs. Toyota Motor Corp |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |