Correlation Between Mitsubishi Electric and Yaskawa Electric
Can any of the company-specific risk be diversified away by investing in both Mitsubishi Electric and Yaskawa Electric 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 Yaskawa Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsubishi Electric Corp and Yaskawa Electric Corp, you can compare the effects of market volatilities on Mitsubishi Electric and Yaskawa Electric 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 Yaskawa Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi Electric and Yaskawa Electric.
Diversification Opportunities for Mitsubishi Electric and Yaskawa Electric
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mitsubishi and Yaskawa is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi Electric Corp and Yaskawa Electric Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yaskawa Electric Corp 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 Corp are associated (or correlated) with Yaskawa Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yaskawa Electric Corp has no effect on the direction of Mitsubishi Electric i.e., Mitsubishi Electric and Yaskawa Electric go up and down completely randomly.
Pair Corralation between Mitsubishi Electric and Yaskawa Electric
Assuming the 90 days horizon Mitsubishi Electric Corp is expected to generate 1.65 times more return on investment than Yaskawa Electric. However, Mitsubishi Electric is 1.65 times more volatile than Yaskawa Electric Corp. It trades about 0.17 of its potential returns per unit of risk. Yaskawa Electric Corp is currently generating about -0.03 per unit of risk. If you would invest 3,054 in Mitsubishi Electric Corp on August 25, 2024 and sell it today you would earn a total of 311.00 from holding Mitsubishi Electric Corp or generate 10.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitsubishi Electric Corp vs. Yaskawa Electric Corp
Performance |
| Timeline |
| Mitsubishi Electric Corp |
| Yaskawa Electric Corp |
Mitsubishi Electric and Yaskawa Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsubishi Electric and Yaskawa Electric
The main advantage of trading using opposite Mitsubishi Electric and Yaskawa Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi Electric position performs unexpectedly, Yaskawa Electric 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 Yaskawa Electric will offset losses from the drop in Yaskawa Electric's long position.| Mitsubishi Electric vs. Legrand SA ADR | Mitsubishi Electric vs. Powell Industries | Mitsubishi Electric vs. RF Industries | Mitsubishi Electric vs. Atkore International Group |
| Yaskawa Electric vs. Fanuc | Yaskawa Electric vs. OMRON Corp ADR | Yaskawa Electric vs. Mitsubishi Electric Corp | Yaskawa Electric vs. Keyence |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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