Correlation Between Comba Telecom and Mitsubishi Gas
Can any of the company-specific risk be diversified away by investing in both Comba Telecom and Mitsubishi Gas 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 Comba Telecom and Mitsubishi Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comba Telecom Systems and Mitsubishi Gas Chemical, you can compare the effects of market volatilities on Comba Telecom and Mitsubishi Gas 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 Comba Telecom with a short position of Mitsubishi Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comba Telecom and Mitsubishi Gas.
Diversification Opportunities for Comba Telecom and Mitsubishi Gas
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Comba and Mitsubishi is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Comba Telecom Systems and Mitsubishi Gas Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsubishi Gas Chemical and Comba Telecom 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 Comba Telecom Systems are associated (or correlated) with Mitsubishi Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsubishi Gas Chemical has no effect on the direction of Comba Telecom i.e., Comba Telecom and Mitsubishi Gas go up and down completely randomly.
Pair Corralation between Comba Telecom and Mitsubishi Gas
Assuming the 90 days trading horizon Comba Telecom Systems is expected to generate 3.19 times more return on investment than Mitsubishi Gas. However, Comba Telecom is 3.19 times more volatile than Mitsubishi Gas Chemical. It trades about 0.13 of its potential returns per unit of risk. Mitsubishi Gas Chemical is currently generating about -0.02 per unit of risk. If you would invest 11.00 in Comba Telecom Systems on October 11, 2024 and sell it today you would earn a total of 1.00 from holding Comba Telecom Systems or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comba Telecom Systems vs. Mitsubishi Gas Chemical
Performance |
| Timeline |
| Comba Telecom Systems |
| Mitsubishi Gas Chemical |
Comba Telecom and Mitsubishi Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comba Telecom and Mitsubishi Gas
The main advantage of trading using opposite Comba Telecom and Mitsubishi Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comba Telecom position performs unexpectedly, Mitsubishi Gas 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 Gas will offset losses from the drop in Mitsubishi Gas' long position.| Comba Telecom vs. Nok Airlines PCL | Comba Telecom vs. CSSC Offshore Marine | Comba Telecom vs. Solstad Offshore ASA | Comba Telecom vs. International Consolidated Airlines |
| Mitsubishi Gas vs. CITIC Telecom International | Mitsubishi Gas vs. INTERSHOP Communications Aktiengesellschaft | Mitsubishi Gas vs. Comba Telecom Systems | Mitsubishi Gas vs. PREMIER FOODS |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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