Correlation Between Mitsubishi Gas and Strategic Investments
Can any of the company-specific risk be diversified away by investing in both Mitsubishi Gas and Strategic Investments 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 Strategic Investments 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 Strategic Investments AS, you can compare the effects of market volatilities on Mitsubishi Gas and Strategic Investments 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 Strategic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi Gas and Strategic Investments.
Diversification Opportunities for Mitsubishi Gas and Strategic Investments
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mitsubishi and Strategic is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi Gas Chemical and Strategic Investments AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Investments 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 Strategic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Investments has no effect on the direction of Mitsubishi Gas i.e., Mitsubishi Gas and Strategic Investments go up and down completely randomly.
Pair Corralation between Mitsubishi Gas and Strategic Investments
Assuming the 90 days trading horizon Mitsubishi Gas Chemical is expected to generate 0.59 times more return on investment than Strategic Investments. However, Mitsubishi Gas Chemical is 1.7 times less risky than Strategic Investments. It trades about 0.02 of its potential returns per unit of risk. Strategic Investments AS is currently generating about -0.01 per unit of risk. If you would invest 1,620 in Mitsubishi Gas Chemical on September 24, 2024 and sell it today you would earn a total of 30.00 from holding Mitsubishi Gas Chemical or generate 1.85% 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. Strategic Investments AS
Performance |
| Timeline |
| Mitsubishi Gas Chemical |
| Strategic Investments |
Mitsubishi Gas and Strategic Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsubishi Gas and Strategic Investments
The main advantage of trading using opposite Mitsubishi Gas and Strategic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi Gas position performs unexpectedly, Strategic Investments 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 Strategic Investments will offset losses from the drop in Strategic Investments' long position.| Mitsubishi Gas vs. INDO RAMA SYNTHETIC | Mitsubishi Gas vs. Eastman Chemical | Mitsubishi Gas vs. KINGBOARD CHEMICAL | Mitsubishi Gas vs. NISSAN CHEMICAL IND |
| Strategic Investments vs. Blackstone Group | Strategic Investments vs. The Bank of | Strategic Investments vs. Ameriprise Financial | Strategic Investments vs. State Street |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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