Correlation Between Beijing Media and Mitsubishi Materials
Can any of the company-specific risk be diversified away by investing in both Beijing Media and Mitsubishi Materials 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 Beijing Media and Mitsubishi Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beijing Media and Mitsubishi Materials, you can compare the effects of market volatilities on Beijing Media and Mitsubishi Materials 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 Beijing Media with a short position of Mitsubishi Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Media and Mitsubishi Materials.
Diversification Opportunities for Beijing Media and Mitsubishi Materials
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Beijing and Mitsubishi is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Media and Mitsubishi Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsubishi Materials and Beijing Media 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 Beijing Media are associated (or correlated) with Mitsubishi Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsubishi Materials has no effect on the direction of Beijing Media i.e., Beijing Media and Mitsubishi Materials go up and down completely randomly.
Pair Corralation between Beijing Media and Mitsubishi Materials
Assuming the 90 days horizon Beijing Media is expected to generate 3.3 times more return on investment than Mitsubishi Materials. However, Beijing Media is 3.3 times more volatile than Mitsubishi Materials. It trades about 0.01 of its potential returns per unit of risk. Mitsubishi Materials is currently generating about 0.0 per unit of risk. If you would invest 5.30 in Beijing Media on September 4, 2024 and sell it today you would lose (2.10) from holding Beijing Media or give up 39.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Beijing Media vs. Mitsubishi Materials
Performance |
| Timeline |
| Beijing Media |
| Mitsubishi Materials |
Beijing Media and Mitsubishi Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Media and Mitsubishi Materials
The main advantage of trading using opposite Beijing Media and Mitsubishi Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Media position performs unexpectedly, Mitsubishi Materials 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 Mitsubishi Materials will offset losses from the drop in Mitsubishi Materials' long position.| Beijing Media vs. Superior Plus Corp | Beijing Media vs. NMI Holdings | Beijing Media vs. Origin Agritech | Beijing Media vs. SIVERS SEMICONDUCTORS AB |
| Mitsubishi Materials vs. TOTAL GABON | Mitsubishi Materials vs. Walgreens Boots Alliance | Mitsubishi Materials vs. Peak Resources Limited |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |