Correlation Between Mitsubishi Gas and Agnico Eagle
Can any of the company-specific risk be diversified away by investing in both Mitsubishi Gas and Agnico Eagle 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 Agnico Eagle 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 Agnico Eagle Mines, you can compare the effects of market volatilities on Mitsubishi Gas and Agnico Eagle 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 Agnico Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi Gas and Agnico Eagle.
Diversification Opportunities for Mitsubishi Gas and Agnico Eagle
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mitsubishi and Agnico is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi Gas Chemical and Agnico Eagle Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agnico Eagle Mines 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 Agnico Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agnico Eagle Mines has no effect on the direction of Mitsubishi Gas i.e., Mitsubishi Gas and Agnico Eagle go up and down completely randomly.
Pair Corralation between Mitsubishi Gas and Agnico Eagle
Assuming the 90 days trading horizon Mitsubishi Gas Chemical is expected to under-perform the Agnico Eagle. But the stock apears to be less risky and, when comparing its historical volatility, Mitsubishi Gas Chemical is 1.45 times less risky than Agnico Eagle. The stock trades about -0.01 of its potential returns per unit of risk. The Agnico Eagle Mines is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 7,161 in Agnico Eagle Mines on September 13, 2024 and sell it today you would earn a total of 1,075 from holding Agnico Eagle Mines or generate 15.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Mitsubishi Gas Chemical vs. Agnico Eagle Mines
Performance |
| Timeline |
| Mitsubishi Gas Chemical |
| Agnico Eagle Mines |
Mitsubishi Gas and Agnico Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsubishi Gas and Agnico Eagle
The main advantage of trading using opposite Mitsubishi Gas and Agnico Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi Gas position performs unexpectedly, Agnico Eagle 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 Agnico Eagle will offset losses from the drop in Agnico Eagle's long position.| Mitsubishi Gas vs. Apple Inc | Mitsubishi Gas vs. Apple Inc | Mitsubishi Gas vs. Apple Inc | Mitsubishi Gas vs. Apple Inc |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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