Correlation Between Mitsubishi Electric and Hana Microelectronics
Can any of the company-specific risk be diversified away by investing in both Mitsubishi Electric and Hana Microelectronics 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 Hana Microelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsubishi Electric and Hana Microelectronics Public, you can compare the effects of market volatilities on Mitsubishi Electric and Hana Microelectronics 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 Hana Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi Electric and Hana Microelectronics.
Diversification Opportunities for Mitsubishi Electric and Hana Microelectronics
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mitsubishi and Hana is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi Electric and Hana Microelectronics Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hana Microelectronics 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 Hana Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hana Microelectronics has no effect on the direction of Mitsubishi Electric i.e., Mitsubishi Electric and Hana Microelectronics go up and down completely randomly.
Pair Corralation between Mitsubishi Electric and Hana Microelectronics
Assuming the 90 days trading horizon Mitsubishi Electric is expected to under-perform the Hana Microelectronics. But the stock apears to be less risky and, when comparing its historical volatility, Mitsubishi Electric is 1.99 times less risky than Hana Microelectronics. The stock trades about -0.01 of its potential returns per unit of risk. The Hana Microelectronics Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 62.00 in Hana Microelectronics Public on September 3, 2024 and sell it today you would earn a total of 11.00 from holding Hana Microelectronics Public or generate 17.74% 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. Hana Microelectronics Public
Performance |
| Timeline |
| Mitsubishi Electric |
| Hana Microelectronics |
Mitsubishi Electric and Hana Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsubishi Electric and Hana Microelectronics
The main advantage of trading using opposite Mitsubishi Electric and Hana Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi Electric position performs unexpectedly, Hana Microelectronics 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 Hana Microelectronics will offset losses from the drop in Hana Microelectronics' 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 |
| Hana Microelectronics vs. China Communications Services | Hana Microelectronics vs. THAI BEVERAGE | Hana Microelectronics vs. Chunghwa Telecom Co | Hana Microelectronics vs. Entravision Communications |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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