Correlation Between Mitsubishi Gas and CHINA EDUCATION
Can any of the company-specific risk be diversified away by investing in both Mitsubishi Gas and CHINA EDUCATION 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 CHINA EDUCATION 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 CHINA EDUCATION GROUP, you can compare the effects of market volatilities on Mitsubishi Gas and CHINA EDUCATION 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 CHINA EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi Gas and CHINA EDUCATION.
Diversification Opportunities for Mitsubishi Gas and CHINA EDUCATION
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mitsubishi and CHINA is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi Gas Chemical and CHINA EDUCATION GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA EDUCATION GROUP 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 CHINA EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA EDUCATION GROUP has no effect on the direction of Mitsubishi Gas i.e., Mitsubishi Gas and CHINA EDUCATION go up and down completely randomly.
Pair Corralation between Mitsubishi Gas and CHINA EDUCATION
Assuming the 90 days trading horizon Mitsubishi Gas is expected to generate 1.56 times less return on investment than CHINA EDUCATION. But when comparing it to its historical volatility, Mitsubishi Gas Chemical is 2.66 times less risky than CHINA EDUCATION. It trades about 0.04 of its potential returns per unit of risk. CHINA EDUCATION GROUP is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 37.00 in CHINA EDUCATION GROUP on October 11, 2024 and sell it today you would earn a total of 2.00 from holding CHINA EDUCATION GROUP or generate 5.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Mitsubishi Gas Chemical vs. CHINA EDUCATION GROUP
Performance |
| Timeline |
| Mitsubishi Gas Chemical |
| CHINA EDUCATION GROUP |
Mitsubishi Gas and CHINA EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsubishi Gas and CHINA EDUCATION
The main advantage of trading using opposite Mitsubishi Gas and CHINA EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi Gas position performs unexpectedly, CHINA EDUCATION 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 CHINA EDUCATION will offset losses from the drop in CHINA EDUCATION's long position.| Mitsubishi Gas vs. CITIC Telecom International | Mitsubishi Gas vs. INTERSHOP Communications Aktiengesellschaft | Mitsubishi Gas vs. Comba Telecom Systems | Mitsubishi Gas vs. PREMIER FOODS |
| CHINA EDUCATION vs. Taiwan Semiconductor Manufacturing | CHINA EDUCATION vs. ELMOS SEMICONDUCTOR | CHINA EDUCATION vs. RCS MediaGroup SpA | CHINA EDUCATION vs. Nexstar Media Group |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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