Correlation Between Mitsubishi Electric and Siemens Energy
Can any of the company-specific risk be diversified away by investing in both Mitsubishi Electric and Siemens Energy 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 Siemens Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsubishi Electric and Siemens Energy AG, you can compare the effects of market volatilities on Mitsubishi Electric and Siemens Energy 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 Siemens Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi Electric and Siemens Energy.
Diversification Opportunities for Mitsubishi Electric and Siemens Energy
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mitsubishi and Siemens is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi Electric and Siemens Energy AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Energy AG 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 Siemens Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siemens Energy AG has no effect on the direction of Mitsubishi Electric i.e., Mitsubishi Electric and Siemens Energy go up and down completely randomly.
Pair Corralation between Mitsubishi Electric and Siemens Energy
Assuming the 90 days trading horizon Mitsubishi Electric is expected to under-perform the Siemens Energy. But the stock apears to be less risky and, when comparing its historical volatility, Mitsubishi Electric is 2.25 times less risky than Siemens Energy. The stock trades about -0.05 of its potential returns per unit of risk. The Siemens Energy AG is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4,856 in Siemens Energy AG on November 27, 2024 and sell it today you would earn a total of 662.00 from holding Siemens Energy AG or generate 13.63% 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. Siemens Energy AG
Performance |
| Timeline |
| Mitsubishi Electric |
| Siemens Energy AG |
Mitsubishi Electric and Siemens Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsubishi Electric and Siemens Energy
The main advantage of trading using opposite Mitsubishi Electric and Siemens Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi Electric position performs unexpectedly, Siemens Energy 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 Siemens Energy will offset losses from the drop in Siemens Energy's long position.| Mitsubishi Electric vs. Treasury Wine Estates | Mitsubishi Electric vs. Aristocrat Leisure Limited | Mitsubishi Electric vs. China Telecom | Mitsubishi Electric vs. CHINA TONTINE WINES |
| Siemens Energy vs. OPKO HEALTH | Siemens Energy vs. Molina Healthcare | Siemens Energy vs. Cardinal Health | Siemens Energy vs. Canadian Utilities Limited |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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