Correlation Between BII Railway and Marubeni
Can any of the company-specific risk be diversified away by investing in both BII Railway and Marubeni 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 BII Railway and Marubeni into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BII Railway Transportation and Marubeni, you can compare the effects of market volatilities on BII Railway and Marubeni 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 BII Railway with a short position of Marubeni. Check out your portfolio center. Please also check ongoing floating volatility patterns of BII Railway and Marubeni.
Diversification Opportunities for BII Railway and Marubeni
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BII and Marubeni is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding BII Railway Transportation and Marubeni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marubeni and BII Railway 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 BII Railway Transportation are associated (or correlated) with Marubeni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marubeni has no effect on the direction of BII Railway i.e., BII Railway and Marubeni go up and down completely randomly.
Pair Corralation between BII Railway and Marubeni
Assuming the 90 days horizon BII Railway Transportation is expected to under-perform the Marubeni. But the stock apears to be less risky and, when comparing its historical volatility, BII Railway Transportation is 1.0 times less risky than Marubeni. The stock trades about -0.09 of its potential returns per unit of risk. The Marubeni is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,374 in Marubeni on September 3, 2024 and sell it today you would earn a total of 35.00 from holding Marubeni or generate 2.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BII Railway Transportation vs. Marubeni
Performance |
| Timeline |
| BII Railway Transpor |
| Marubeni |
BII Railway and Marubeni Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BII Railway and Marubeni
The main advantage of trading using opposite BII Railway and Marubeni positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BII Railway position performs unexpectedly, Marubeni 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 Marubeni will offset losses from the drop in Marubeni's long position.| BII Railway vs. Entravision Communications | BII Railway vs. Consolidated Communications Holdings | BII Railway vs. Chunghwa Telecom Co | BII Railway vs. Verizon Communications |
| Marubeni vs. TITANIUM TRANSPORTGROUP | Marubeni vs. QUEEN S ROAD | Marubeni vs. Fukuyama Transporting Co | Marubeni vs. BII Railway Transportation |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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