Correlation Between Mitsubishi Gas and BII Railway
Can any of the company-specific risk be diversified away by investing in both Mitsubishi Gas and BII Railway 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 BII Railway 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 BII Railway Transportation, you can compare the effects of market volatilities on Mitsubishi Gas and BII Railway 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 BII Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi Gas and BII Railway.
Diversification Opportunities for Mitsubishi Gas and BII Railway
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mitsubishi and BII is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi Gas Chemical and BII Railway Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BII Railway Transpor 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 BII Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BII Railway Transpor has no effect on the direction of Mitsubishi Gas i.e., Mitsubishi Gas and BII Railway go up and down completely randomly.
Pair Corralation between Mitsubishi Gas and BII Railway
Assuming the 90 days trading horizon Mitsubishi Gas Chemical is expected to generate 0.47 times more return on investment than BII Railway. However, Mitsubishi Gas Chemical is 2.13 times less risky than BII Railway. It trades about -0.02 of its potential returns per unit of risk. BII Railway Transportation is currently generating about -0.05 per unit of risk. If you would invest 1,710 in Mitsubishi Gas Chemical on November 1, 2024 and sell it today you would lose (50.00) from holding Mitsubishi Gas Chemical or give up 2.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitsubishi Gas Chemical vs. BII Railway Transportation
Performance |
| Timeline |
| Mitsubishi Gas Chemical |
| BII Railway Transpor |
Mitsubishi Gas and BII Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsubishi Gas and BII Railway
The main advantage of trading using opposite Mitsubishi Gas and BII Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi Gas position performs unexpectedly, BII Railway 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 BII Railway will offset losses from the drop in BII Railway's long position.| Mitsubishi Gas vs. STRAYER EDUCATION | Mitsubishi Gas vs. betterU Education Corp | Mitsubishi Gas vs. ASPEN TECHINC DL | Mitsubishi Gas vs. VELA TECHNOLPLC LS 0001 |
| BII Railway vs. BORR DRILLING NEW | BII Railway vs. PROSIEBENSAT1 MEDIADR4 | BII Railway vs. ZINC MEDIA GR | BII Railway vs. ATRESMEDIA |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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