Correlation Between Mitsubishi Gas and China Communications
Can any of the company-specific risk be diversified away by investing in both Mitsubishi Gas and China Communications 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 Communications 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 Communications Services, you can compare the effects of market volatilities on Mitsubishi Gas and China Communications 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 Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi Gas and China Communications.
Diversification Opportunities for Mitsubishi Gas and China Communications
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mitsubishi and China is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi Gas Chemical and China Communications Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Communications 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 Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Communications has no effect on the direction of Mitsubishi Gas i.e., Mitsubishi Gas and China Communications go up and down completely randomly.
Pair Corralation between Mitsubishi Gas and China Communications
Assuming the 90 days trading horizon Mitsubishi Gas is expected to generate 6.57 times less return on investment than China Communications. But when comparing it to its historical volatility, Mitsubishi Gas Chemical is 3.29 times less risky than China Communications. It trades about 0.04 of its potential returns per unit of risk. China Communications Services is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 19.00 in China Communications Services on November 4, 2024 and sell it today you would earn a total of 34.00 from holding China Communications Services or generate 178.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitsubishi Gas Chemical vs. China Communications Services
Performance |
| Timeline |
| Mitsubishi Gas Chemical |
| China Communications |
Mitsubishi Gas and China Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsubishi Gas and China Communications
The main advantage of trading using opposite Mitsubishi Gas and China Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi Gas position performs unexpectedly, China Communications 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 Communications will offset losses from the drop in China Communications' long position.| Mitsubishi Gas vs. Avanos Medical | Mitsubishi Gas vs. Elmos Semiconductor SE | Mitsubishi Gas vs. CompuGroup Medical SE | Mitsubishi Gas vs. MagnaChip Semiconductor Corp |
| China Communications vs. T Mobile | China Communications vs. China Mobile Limited | China Communications vs. Verizon Communications | China Communications vs. ATT Inc |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |