Correlation Between CHINA EDUCATION and STOMO MITSUI
Can any of the company-specific risk be diversified away by investing in both CHINA EDUCATION and STOMO MITSUI 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 CHINA EDUCATION and STOMO MITSUI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA EDUCATION GROUP and STOMO MITSUI FINL, you can compare the effects of market volatilities on CHINA EDUCATION and STOMO MITSUI 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 CHINA EDUCATION with a short position of STOMO MITSUI. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA EDUCATION and STOMO MITSUI.
Diversification Opportunities for CHINA EDUCATION and STOMO MITSUI
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CHINA and STOMO is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding CHINA EDUCATION GROUP and STOMO MITSUI FINL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STOMO MITSUI FINL and CHINA EDUCATION 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 CHINA EDUCATION GROUP are associated (or correlated) with STOMO MITSUI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STOMO MITSUI FINL has no effect on the direction of CHINA EDUCATION i.e., CHINA EDUCATION and STOMO MITSUI go up and down completely randomly.
Pair Corralation between CHINA EDUCATION and STOMO MITSUI
Assuming the 90 days horizon CHINA EDUCATION GROUP is expected to generate 1.47 times more return on investment than STOMO MITSUI. However, CHINA EDUCATION is 1.47 times more volatile than STOMO MITSUI FINL. It trades about 0.13 of its potential returns per unit of risk. STOMO MITSUI FINL is currently generating about -0.19 per unit of risk. If you would invest 40.00 in CHINA EDUCATION GROUP on October 1, 2024 and sell it today you would earn a total of 2.00 from holding CHINA EDUCATION GROUP or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA EDUCATION GROUP vs. STOMO MITSUI FINL
Performance |
| Timeline |
| CHINA EDUCATION GROUP |
| STOMO MITSUI FINL |
CHINA EDUCATION and STOMO MITSUI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA EDUCATION and STOMO MITSUI
The main advantage of trading using opposite CHINA EDUCATION and STOMO MITSUI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA EDUCATION position performs unexpectedly, STOMO MITSUI 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 STOMO MITSUI will offset losses from the drop in STOMO MITSUI's long position.| CHINA EDUCATION vs. EAGLE MATERIALS | CHINA EDUCATION vs. Zijin Mining Group | CHINA EDUCATION vs. MCEWEN MINING INC | CHINA EDUCATION vs. Eagle Materials |
| STOMO MITSUI vs. TRADEGATE | STOMO MITSUI vs. Canon Marketing Japan | STOMO MITSUI vs. Meiko Electronics Co | STOMO MITSUI vs. LPKF Laser Electronics |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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