Correlation Between Kansai Electric and Mass Megawat
Can any of the company-specific risk be diversified away by investing in both Kansai Electric and Mass Megawat 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 Kansai Electric and Mass Megawat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kansai Electric Power and Mass Megawat Wind, you can compare the effects of market volatilities on Kansai Electric and Mass Megawat 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 Kansai Electric with a short position of Mass Megawat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kansai Electric and Mass Megawat.
Diversification Opportunities for Kansai Electric and Mass Megawat
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kansai and Mass is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Kansai Electric Power and Mass Megawat Wind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mass Megawat Wind and Kansai Electric 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 Kansai Electric Power are associated (or correlated) with Mass Megawat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mass Megawat Wind has no effect on the direction of Kansai Electric i.e., Kansai Electric and Mass Megawat go up and down completely randomly.
Pair Corralation between Kansai Electric and Mass Megawat
Assuming the 90 days horizon Kansai Electric is expected to generate 45.78 times less return on investment than Mass Megawat. But when comparing it to its historical volatility, Kansai Electric Power is 24.63 times less risky than Mass Megawat. It trades about 0.04 of its potential returns per unit of risk. Mass Megawat Wind is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 132.00 in Mass Megawat Wind on September 2, 2024 and sell it today you would lose (105.00) from holding Mass Megawat Wind or give up 79.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Kansai Electric Power vs. Mass Megawat Wind
Performance |
| Timeline |
| Kansai Electric Power |
| Mass Megawat Wind |
Kansai Electric and Mass Megawat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kansai Electric and Mass Megawat
The main advantage of trading using opposite Kansai Electric and Mass Megawat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kansai Electric position performs unexpectedly, Mass Megawat 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 Mass Megawat will offset losses from the drop in Mass Megawat's long position.| Kansai Electric vs. Wind Works Power | Kansai Electric vs. Alternus Energy Group | Kansai Electric vs. Mass Megawat Wind | Kansai Electric vs. Enlight Renewable Energy |
| Mass Megawat vs. Wind Works Power | Mass Megawat vs. Alternus Energy Group | Mass Megawat vs. Kansai Electric Power | Mass Megawat vs. Green Stream Holdings |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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