Correlation Between Mitsubishi Electric and GEELY AUTOMOBILE
Can any of the company-specific risk be diversified away by investing in both Mitsubishi Electric and GEELY AUTOMOBILE 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 GEELY AUTOMOBILE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsubishi Electric and GEELY AUTOMOBILE, you can compare the effects of market volatilities on Mitsubishi Electric and GEELY AUTOMOBILE 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 GEELY AUTOMOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi Electric and GEELY AUTOMOBILE.
Diversification Opportunities for Mitsubishi Electric and GEELY AUTOMOBILE
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mitsubishi and GEELY is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi Electric and GEELY AUTOMOBILE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEELY AUTOMOBILE 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 GEELY AUTOMOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEELY AUTOMOBILE has no effect on the direction of Mitsubishi Electric i.e., Mitsubishi Electric and GEELY AUTOMOBILE go up and down completely randomly.
Pair Corralation between Mitsubishi Electric and GEELY AUTOMOBILE
Assuming the 90 days trading horizon Mitsubishi Electric is expected to generate 12.44 times less return on investment than GEELY AUTOMOBILE. But when comparing it to its historical volatility, Mitsubishi Electric is 1.7 times less risky than GEELY AUTOMOBILE. It trades about 0.03 of its potential returns per unit of risk. GEELY AUTOMOBILE is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 102.00 in GEELY AUTOMOBILE on September 3, 2024 and sell it today you would earn a total of 66.00 from holding GEELY AUTOMOBILE or generate 64.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitsubishi Electric vs. GEELY AUTOMOBILE
Performance |
| Timeline |
| Mitsubishi Electric |
| GEELY AUTOMOBILE |
Mitsubishi Electric and GEELY AUTOMOBILE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsubishi Electric and GEELY AUTOMOBILE
The main advantage of trading using opposite Mitsubishi Electric and GEELY AUTOMOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi Electric position performs unexpectedly, GEELY AUTOMOBILE 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 GEELY AUTOMOBILE will offset losses from the drop in GEELY AUTOMOBILE's long position.| Mitsubishi Electric vs. Bausch Health Companies | Mitsubishi Electric vs. Geely Automobile Holdings | Mitsubishi Electric vs. Grupo Carso SAB | Mitsubishi Electric vs. Diamondrock Hospitality Co |
| GEELY AUTOMOBILE vs. TOTAL GABON | GEELY AUTOMOBILE vs. Walgreens Boots Alliance | GEELY AUTOMOBILE vs. Peak Resources 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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