Correlation Between Panasonic Corp and Old Mutual
Can any of the company-specific risk be diversified away by investing in both Panasonic Corp and Old Mutual 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 Old Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Panasonic Corp and Old Mutual, you can compare the effects of market volatilities on Panasonic Corp and Old Mutual 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 Old Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panasonic Corp and Old Mutual.
Diversification Opportunities for Panasonic Corp and Old Mutual
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Panasonic and Old is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Panasonic Corp and Old Mutual in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Mutual 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 Old Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Mutual has no effect on the direction of Panasonic Corp i.e., Panasonic Corp and Old Mutual go up and down completely randomly.
Pair Corralation between Panasonic Corp and Old Mutual
Assuming the 90 days trading horizon Panasonic Corp is expected to generate 1.82 times more return on investment than Old Mutual. However, Panasonic Corp is 1.82 times more volatile than Old Mutual. It trades about 0.29 of its potential returns per unit of risk. Old Mutual is currently generating about 0.03 per unit of risk. If you would invest 134,850 in Panasonic Corp on September 5, 2024 and sell it today you would earn a total of 12,700 from holding Panasonic Corp or generate 9.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 52.17% |
| Values | Daily Returns |
Panasonic Corp vs. Old Mutual
Performance |
| Timeline |
| Panasonic Corp |
| Old Mutual |
Panasonic Corp and Old Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Panasonic Corp and Old Mutual
The main advantage of trading using opposite Panasonic Corp and Old Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Panasonic Corp position performs unexpectedly, Old Mutual 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 Old Mutual will offset losses from the drop in Old Mutual's long position.| Panasonic Corp vs. Quadrise Plc | Panasonic Corp vs. ImmuPharma PLC | Panasonic Corp vs. Intuitive Investments Group | Panasonic Corp vs. European Metals Holdings |
| Old Mutual vs. Toyota Motor Corp | Old Mutual vs. SoftBank Group Corp | Old Mutual vs. Fannie Mae | Old Mutual vs. Panasonic 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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