Correlation Between Mitsubishi Gas and China BlueChemical
Can any of the company-specific risk be diversified away by investing in both Mitsubishi Gas and China BlueChemical 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 BlueChemical 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 BlueChemical, you can compare the effects of market volatilities on Mitsubishi Gas and China BlueChemical 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 BlueChemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi Gas and China BlueChemical.
Diversification Opportunities for Mitsubishi Gas and China BlueChemical
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Mitsubishi and China is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi Gas Chemical and China BlueChemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China BlueChemical 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 BlueChemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China BlueChemical has no effect on the direction of Mitsubishi Gas i.e., Mitsubishi Gas and China BlueChemical go up and down completely randomly.
Pair Corralation between Mitsubishi Gas and China BlueChemical
Assuming the 90 days trading horizon Mitsubishi Gas is expected to generate 1.06 times less return on investment than China BlueChemical. But when comparing it to its historical volatility, Mitsubishi Gas Chemical is 2.05 times less risky than China BlueChemical. It trades about 0.05 of its potential returns per unit of risk. China BlueChemical is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 22.00 in China BlueChemical on August 31, 2024 and sell it today you would earn a total of 2.00 from holding China BlueChemical or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Mitsubishi Gas Chemical vs. China BlueChemical
Performance |
| Timeline |
| Mitsubishi Gas Chemical |
| China BlueChemical |
Mitsubishi Gas and China BlueChemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsubishi Gas and China BlueChemical
The main advantage of trading using opposite Mitsubishi Gas and China BlueChemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi Gas position performs unexpectedly, China BlueChemical 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 BlueChemical will offset losses from the drop in China BlueChemical's long position.| Mitsubishi Gas vs. Apple Inc | Mitsubishi Gas vs. Apple Inc | Mitsubishi Gas vs. Apple Inc | Mitsubishi Gas vs. Apple Inc |
| China BlueChemical vs. Dalata Hotel Group | China BlueChemical vs. HANOVER INSURANCE | China BlueChemical vs. The Hanover Insurance | China BlueChemical vs. Host Hotels Resorts |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| CEOs Directory Screen CEOs from public companies around the world |