Correlation Between Mitsui Fudosan and New World
Can any of the company-specific risk be diversified away by investing in both Mitsui Fudosan and New World 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 Mitsui Fudosan and New World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsui Fudosan Co and New World Development, you can compare the effects of market volatilities on Mitsui Fudosan and New World 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 Mitsui Fudosan with a short position of New World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsui Fudosan and New World.
Diversification Opportunities for Mitsui Fudosan and New World
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mitsui and New is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Mitsui Fudosan Co and New World Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New World Development and Mitsui Fudosan 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 Mitsui Fudosan Co are associated (or correlated) with New World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New World Development has no effect on the direction of Mitsui Fudosan i.e., Mitsui Fudosan and New World go up and down completely randomly.
Pair Corralation between Mitsui Fudosan and New World
Assuming the 90 days horizon Mitsui Fudosan Co is expected to generate 0.2 times more return on investment than New World. However, Mitsui Fudosan Co is 4.95 times less risky than New World. It trades about -0.25 of its potential returns per unit of risk. New World Development is currently generating about -0.16 per unit of risk. If you would invest 2,602 in Mitsui Fudosan Co on August 24, 2024 and sell it today you would lose (183.00) from holding Mitsui Fudosan Co or give up 7.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Mitsui Fudosan Co vs. New World Development
Performance |
| Timeline |
| Mitsui Fudosan |
| New World Development |
Mitsui Fudosan and New World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsui Fudosan and New World
The main advantage of trading using opposite Mitsui Fudosan and New World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsui Fudosan position performs unexpectedly, New World 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 New World will offset losses from the drop in New World's long position.| Mitsui Fudosan vs. St Joe Company | Mitsui Fudosan vs. Stratus Properties | Mitsui Fudosan vs. New World Development |
| New World vs. Henderson Land Development | New World vs. Sun Hung Kai | New World vs. Hang Lung Properties | New World vs. Swire Pacific |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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