Correlation Between Mitsubishi Electric and Bayer AG
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By analyzing existing cross correlation between Mitsubishi Electric and Bayer AG NA, you can compare the effects of market volatilities on Mitsubishi Electric and Bayer AG 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 Bayer AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi Electric and Bayer AG.
Diversification Opportunities for Mitsubishi Electric and Bayer AG
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mitsubishi and Bayer is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi Electric and Bayer AG NA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayer AG NA 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 Bayer AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayer AG NA has no effect on the direction of Mitsubishi Electric i.e., Mitsubishi Electric and Bayer AG go up and down completely randomly.
Pair Corralation between Mitsubishi Electric and Bayer AG
Assuming the 90 days trading horizon Mitsubishi Electric is expected to under-perform the Bayer AG. In addition to that, Mitsubishi Electric is 1.17 times more volatile than Bayer AG NA. It trades about -0.18 of its total potential returns per unit of risk. Bayer AG NA is currently generating about 0.18 per unit of volatility. If you would invest 2,145 in Bayer AG NA on November 28, 2024 and sell it today you would earn a total of 119.00 from holding Bayer AG NA or generate 5.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitsubishi Electric vs. Bayer AG NA
Performance |
| Timeline |
| Mitsubishi Electric |
| Bayer AG NA |
Mitsubishi Electric and Bayer AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsubishi Electric and Bayer AG
The main advantage of trading using opposite Mitsubishi Electric and Bayer AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi Electric position performs unexpectedly, Bayer AG 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 Bayer AG will offset losses from the drop in Bayer AG's long position.| Mitsubishi Electric vs. Austevoll Seafood ASA | Mitsubishi Electric vs. SENECA FOODS A | Mitsubishi Electric vs. GWILLI FOOD | Mitsubishi Electric vs. Casio Computer CoLtd |
| Bayer AG vs. Micron Technology | Bayer AG vs. BRIT AMER TOBACCO | Bayer AG vs. X FAB Silicon Foundries | Bayer AG vs. MINCO SILVER |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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