Correlation Between Mitsubishi Gas and Xenia Hotels
Can any of the company-specific risk be diversified away by investing in both Mitsubishi Gas and Xenia Hotels 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 Gas and Xenia Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsubishi Gas Chemical and Xenia Hotels Resorts, you can compare the effects of market volatilities on Mitsubishi Gas and Xenia Hotels 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 Gas with a short position of Xenia Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi Gas and Xenia Hotels.
Diversification Opportunities for Mitsubishi Gas and Xenia Hotels
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mitsubishi and Xenia is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi Gas Chemical and Xenia Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xenia Hotels Resorts and Mitsubishi Gas 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 Gas Chemical are associated (or correlated) with Xenia Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xenia Hotels Resorts has no effect on the direction of Mitsubishi Gas i.e., Mitsubishi Gas and Xenia Hotels go up and down completely randomly.
Pair Corralation between Mitsubishi Gas and Xenia Hotels
Assuming the 90 days trading horizon Mitsubishi Gas Chemical is expected to generate 1.01 times more return on investment than Xenia Hotels. However, Mitsubishi Gas is 1.01 times more volatile than Xenia Hotels Resorts. It trades about 0.05 of its potential returns per unit of risk. Xenia Hotels Resorts is currently generating about 0.04 per unit of risk. If you would invest 1,340 in Mitsubishi Gas Chemical on September 1, 2024 and sell it today you would earn a total of 410.00 from holding Mitsubishi Gas Chemical or generate 30.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitsubishi Gas Chemical vs. Xenia Hotels Resorts
Performance |
| Timeline |
| Mitsubishi Gas Chemical |
| Xenia Hotels Resorts |
Mitsubishi Gas and Xenia Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsubishi Gas and Xenia Hotels
The main advantage of trading using opposite Mitsubishi Gas and Xenia Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi Gas position performs unexpectedly, Xenia Hotels 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 Xenia Hotels will offset losses from the drop in Xenia Hotels' long position.| Mitsubishi Gas vs. PUBLIC STORAGE PRFO | Mitsubishi Gas vs. Hyrican Informationssysteme Aktiengesellschaft | Mitsubishi Gas vs. GREENX METALS LTD | Mitsubishi Gas vs. ADRIATIC METALS LS 013355 |
| Xenia Hotels vs. CARSALESCOM | Xenia Hotels vs. SMA Solar Technology | Xenia Hotels vs. Tradeweb Markets | Xenia Hotels vs. AECOM TECHNOLOGY |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |