Correlation Between Mitsubishi Electric and NISSHA
Can any of the company-specific risk be diversified away by investing in both Mitsubishi Electric and NISSHA 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 Mitsubishi Electric and NISSHA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsubishi Electric and NISSHA LTD, you can compare the effects of market volatilities on Mitsubishi Electric and NISSHA 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 Mitsubishi Electric with a short position of NISSHA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi Electric and NISSHA.
Diversification Opportunities for Mitsubishi Electric and NISSHA
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mitsubishi and NISSHA is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi Electric and NISSHA LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NISSHA LTD and Mitsubishi 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 Mitsubishi Electric are associated (or correlated) with NISSHA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NISSHA LTD has no effect on the direction of Mitsubishi Electric i.e., Mitsubishi Electric and NISSHA go up and down completely randomly.
Pair Corralation between Mitsubishi Electric and NISSHA
Assuming the 90 days trading horizon Mitsubishi Electric is expected to generate 0.69 times more return on investment than NISSHA. However, Mitsubishi Electric is 1.45 times less risky than NISSHA. It trades about 0.07 of its potential returns per unit of risk. NISSHA LTD is currently generating about -0.12 per unit of risk. If you would invest 1,621 in Mitsubishi Electric on September 4, 2024 and sell it today you would earn a total of 40.00 from holding Mitsubishi Electric or generate 2.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitsubishi Electric vs. NISSHA LTD
Performance |
| Timeline |
| Mitsubishi Electric |
| NISSHA LTD |
Mitsubishi Electric and NISSHA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsubishi Electric and NISSHA
The main advantage of trading using opposite Mitsubishi Electric and NISSHA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi Electric position performs unexpectedly, NISSHA 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 NISSHA will offset losses from the drop in NISSHA's long position.| Mitsubishi Electric vs. Mitsubishi Gas Chemical | Mitsubishi Electric vs. SHIN ETSU CHEMICAL | Mitsubishi Electric vs. China BlueChemical | Mitsubishi Electric vs. Quaker Chemical |
| NISSHA vs. Hon Hai Precision | NISSHA vs. Samsung SDI Co | NISSHA vs. Murata Manufacturing Co | NISSHA vs. Mitsubishi Electric |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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