Correlation Between Marubeni Corp and Alaska Power
Can any of the company-specific risk be diversified away by investing in both Marubeni Corp and Alaska Power 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 Marubeni Corp and Alaska Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marubeni Corp ADR and Alaska Power Telephone, you can compare the effects of market volatilities on Marubeni Corp and Alaska Power 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 Marubeni Corp with a short position of Alaska Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marubeni Corp and Alaska Power.
Diversification Opportunities for Marubeni Corp and Alaska Power
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Marubeni and Alaska is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Marubeni Corp ADR and Alaska Power Telephone in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alaska Power Telephone and Marubeni Corp 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 Marubeni Corp ADR are associated (or correlated) with Alaska Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alaska Power Telephone has no effect on the direction of Marubeni Corp i.e., Marubeni Corp and Alaska Power go up and down completely randomly.
Pair Corralation between Marubeni Corp and Alaska Power
Assuming the 90 days horizon Marubeni Corp is expected to generate 8.52 times less return on investment than Alaska Power. In addition to that, Marubeni Corp is 2.76 times more volatile than Alaska Power Telephone. It trades about 0.01 of its total potential returns per unit of risk. Alaska Power Telephone is currently generating about 0.29 per unit of volatility. If you would invest 5,340 in Alaska Power Telephone on August 25, 2024 and sell it today you would earn a total of 210.00 from holding Alaska Power Telephone or generate 3.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marubeni Corp ADR vs. Alaska Power Telephone
Performance |
| Timeline |
| Marubeni Corp ADR |
| Alaska Power Telephone |
Marubeni Corp and Alaska Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marubeni Corp and Alaska Power
The main advantage of trading using opposite Marubeni Corp and Alaska Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marubeni Corp position performs unexpectedly, Alaska Power 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 Alaska Power will offset losses from the drop in Alaska Power's long position.| Marubeni Corp vs. Mitsubishi Corp | Marubeni Corp vs. Itochu Corp ADR | Marubeni Corp vs. Marubeni | Marubeni Corp vs. Sumitomo Corp ADR |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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