Correlation Between Mass Megawat and Kansai Electric
Can any of the company-specific risk be diversified away by investing in both Mass Megawat and Kansai 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 Mass Megawat and Kansai Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mass Megawat Wind and Kansai Electric Power, you can compare the effects of market volatilities on Mass Megawat and Kansai 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 Mass Megawat with a short position of Kansai Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mass Megawat and Kansai Electric.
Diversification Opportunities for Mass Megawat and Kansai Electric
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mass and Kansai is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Mass Megawat Wind and Kansai Electric Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kansai Electric Power and Mass Megawat 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 Mass Megawat Wind are associated (or correlated) with Kansai Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kansai Electric Power has no effect on the direction of Mass Megawat i.e., Mass Megawat and Kansai Electric go up and down completely randomly.
Pair Corralation between Mass Megawat and Kansai Electric
Given the investment horizon of 90 days Mass Megawat Wind is expected to generate 9.02 times more return on investment than Kansai Electric. However, Mass Megawat is 9.02 times more volatile than Kansai Electric Power. It trades about 0.1 of its potential returns per unit of risk. Kansai Electric Power is currently generating about -0.26 per unit of risk. If you would invest 48.00 in Mass Megawat Wind on August 31, 2024 and sell it today you would lose (21.00) from holding Mass Megawat Wind or give up 43.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mass Megawat Wind vs. Kansai Electric Power
Performance |
| Timeline |
| Mass Megawat Wind |
| Kansai Electric Power |
Mass Megawat and Kansai Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mass Megawat and Kansai Electric
The main advantage of trading using opposite Mass Megawat and Kansai Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mass Megawat position performs unexpectedly, Kansai 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 Kansai Electric will offset losses from the drop in Kansai Electric's long position.| Mass Megawat vs. Seychelle Environmtl | Mass Megawat vs. Energy and Water | Mass Megawat vs. One World Universe | Mass Megawat vs. Vow ASA |
| Kansai Electric vs. Constellation Energy Corp | Kansai Electric vs. Orsted AS ADR | Kansai Electric vs. HUMANA INC | Kansai Electric vs. Aquagold International |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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