Correlation Between Caseys General and Mitsubishi Materials
Can any of the company-specific risk be diversified away by investing in both Caseys General 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 Caseys General and Mitsubishi Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caseys General Stores and Mitsubishi Materials, you can compare the effects of market volatilities on Caseys General 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 Caseys General with a short position of Mitsubishi Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and Mitsubishi Materials.
Diversification Opportunities for Caseys General and Mitsubishi Materials
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Caseys and Mitsubishi is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and Mitsubishi Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsubishi Materials and Caseys General 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 Caseys General Stores 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 Caseys General i.e., Caseys General and Mitsubishi Materials go up and down completely randomly.
Pair Corralation between Caseys General and Mitsubishi Materials
Assuming the 90 days trading horizon Caseys General Stores is expected to generate 0.89 times more return on investment than Mitsubishi Materials. However, Caseys General Stores is 1.12 times less risky than Mitsubishi Materials. It trades about 0.11 of its potential returns per unit of risk. Mitsubishi Materials is currently generating about -0.01 per unit of risk. If you would invest 26,256 in Caseys General Stores on November 8, 2024 and sell it today you would earn a total of 14,744 from holding Caseys General Stores or generate 56.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caseys General Stores vs. Mitsubishi Materials
Performance |
| Timeline |
| Caseys General Stores |
| Mitsubishi Materials |
Caseys General and Mitsubishi Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caseys General and Mitsubishi Materials
The main advantage of trading using opposite Caseys General and Mitsubishi Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General 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.| Caseys General vs. MUTUIONLINE | Caseys General vs. AGNC INVESTMENT | Caseys General vs. BOSTON BEER A | Caseys General vs. National Beverage Corp |
| Mitsubishi Materials vs. FAST RETAIL ADR | Mitsubishi Materials vs. CARSALESCOM | Mitsubishi Materials vs. PACIFIC ONLINE | Mitsubishi Materials vs. CarsalesCom |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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