Correlation Between Mitsubishi Electric and Woolworths Group
Can any of the company-specific risk be diversified away by investing in both Mitsubishi Electric and Woolworths Group 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 Woolworths Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsubishi Electric and Woolworths Group Limited, you can compare the effects of market volatilities on Mitsubishi Electric and Woolworths Group 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 Woolworths Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi Electric and Woolworths Group.
Diversification Opportunities for Mitsubishi Electric and Woolworths Group
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mitsubishi and Woolworths is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi Electric and Woolworths Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woolworths Group 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 Woolworths Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woolworths Group has no effect on the direction of Mitsubishi Electric i.e., Mitsubishi Electric and Woolworths Group go up and down completely randomly.
Pair Corralation between Mitsubishi Electric and Woolworths Group
Assuming the 90 days trading horizon Mitsubishi Electric is expected to generate 1.56 times more return on investment than Woolworths Group. However, Mitsubishi Electric is 1.56 times more volatile than Woolworths Group Limited. It trades about 0.11 of its potential returns per unit of risk. Woolworths Group Limited is currently generating about -0.18 per unit of risk. If you would invest 1,423 in Mitsubishi Electric on August 29, 2024 and sell it today you would earn a total of 140.00 from holding Mitsubishi Electric or generate 9.84% 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. Woolworths Group Limited
Performance |
| Timeline |
| Mitsubishi Electric |
| Woolworths Group |
Mitsubishi Electric and Woolworths Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsubishi Electric and Woolworths Group
The main advantage of trading using opposite Mitsubishi Electric and Woolworths Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi Electric position performs unexpectedly, Woolworths Group 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 Woolworths Group will offset losses from the drop in Woolworths Group's long position.| Mitsubishi Electric vs. MeVis Medical Solutions | Mitsubishi Electric vs. Renesas Electronics | Mitsubishi Electric vs. SINGAPORE AIRLINES | Mitsubishi Electric vs. Japan Medical Dynamic |
| Woolworths Group vs. The Boston Beer | Woolworths Group vs. Air Lease | Woolworths Group vs. Global Ship Lease | Woolworths Group vs. Fevertree Drinks PLC |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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