Correlation Between Mitsubishi Corp and FUJIFILM Holdings
Can any of the company-specific risk be diversified away by investing in both Mitsubishi Corp and FUJIFILM Holdings 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 Corp and FUJIFILM Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsubishi Corp and FUJIFILM Holdings Corp, you can compare the effects of market volatilities on Mitsubishi Corp and FUJIFILM Holdings 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 Corp with a short position of FUJIFILM Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi Corp and FUJIFILM Holdings.
Diversification Opportunities for Mitsubishi Corp and FUJIFILM Holdings
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mitsubishi and FUJIFILM is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi Corp and FUJIFILM Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUJIFILM Holdings Corp and Mitsubishi Corp 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 Corp are associated (or correlated) with FUJIFILM Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUJIFILM Holdings Corp has no effect on the direction of Mitsubishi Corp i.e., Mitsubishi Corp and FUJIFILM Holdings go up and down completely randomly.
Pair Corralation between Mitsubishi Corp and FUJIFILM Holdings
Assuming the 90 days horizon Mitsubishi Corp is expected to generate 1.51 times more return on investment than FUJIFILM Holdings. However, Mitsubishi Corp is 1.51 times more volatile than FUJIFILM Holdings Corp. It trades about 0.07 of its potential returns per unit of risk. FUJIFILM Holdings Corp is currently generating about 0.07 per unit of risk. If you would invest 947.00 in Mitsubishi Corp on August 27, 2024 and sell it today you would earn a total of 773.00 from holding Mitsubishi Corp or generate 81.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 31.65% |
| Values | Daily Returns |
Mitsubishi Corp vs. FUJIFILM Holdings Corp
Performance |
| Timeline |
| Mitsubishi Corp |
| FUJIFILM Holdings Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Mitsubishi Corp and FUJIFILM Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsubishi Corp and FUJIFILM Holdings
The main advantage of trading using opposite Mitsubishi Corp and FUJIFILM Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi Corp position performs unexpectedly, FUJIFILM Holdings 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 FUJIFILM Holdings will offset losses from the drop in FUJIFILM Holdings' long position.| Mitsubishi Corp vs. Marubeni Corp ADR | Mitsubishi Corp vs. Itochu Corp ADR | Mitsubishi Corp vs. Marubeni | Mitsubishi Corp vs. Sumitomo Corp ADR |
| FUJIFILM Holdings vs. Sumitomo Corp ADR | FUJIFILM Holdings vs. Hitachi | FUJIFILM Holdings vs. Marubeni Corp ADR | FUJIFILM Holdings vs. Mitsubishi Corp |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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