Correlation Between Mitsubishi Gas and Mercedes-Benz Group
Can any of the company-specific risk be diversified away by investing in both Mitsubishi Gas and Mercedes-Benz Group 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 Mercedes-Benz Group 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 Mercedes Benz Group AG, you can compare the effects of market volatilities on Mitsubishi Gas and Mercedes-Benz Group 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 Mercedes-Benz Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi Gas and Mercedes-Benz Group.
Diversification Opportunities for Mitsubishi Gas and Mercedes-Benz Group
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mitsubishi and Mercedes-Benz is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi Gas Chemical and Mercedes Benz Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercedes Benz 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 Mercedes-Benz Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercedes Benz Group has no effect on the direction of Mitsubishi Gas i.e., Mitsubishi Gas and Mercedes-Benz Group go up and down completely randomly.
Pair Corralation between Mitsubishi Gas and Mercedes-Benz Group
Assuming the 90 days trading horizon Mitsubishi Gas Chemical is expected to generate 0.84 times more return on investment than Mercedes-Benz Group. However, Mitsubishi Gas Chemical is 1.19 times less risky than Mercedes-Benz Group. It trades about 0.03 of its potential returns per unit of risk. Mercedes Benz Group AG is currently generating about -0.1 per unit of risk. If you would invest 1,650 in Mitsubishi Gas Chemical on October 14, 2024 and sell it today you would earn a total of 10.00 from holding Mitsubishi Gas Chemical or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitsubishi Gas Chemical vs. Mercedes Benz Group AG
Performance |
| Timeline |
| Mitsubishi Gas Chemical |
| Mercedes Benz Group |
Mitsubishi Gas and Mercedes-Benz Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsubishi Gas and Mercedes-Benz Group
The main advantage of trading using opposite Mitsubishi Gas and Mercedes-Benz Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi Gas position performs unexpectedly, Mercedes-Benz Group 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 Mercedes-Benz Group will offset losses from the drop in Mercedes-Benz Group's long position.| Mitsubishi Gas vs. Forsys Metals Corp | Mitsubishi Gas vs. T MOBILE US | Mitsubishi Gas vs. SALESFORCE INC CDR | Mitsubishi Gas vs. CODERE ONLINE LUX |
| Mercedes-Benz Group vs. GALENA MINING LTD | Mercedes-Benz Group vs. Mitsubishi Gas Chemical | Mercedes-Benz Group vs. Zijin Mining Group | Mercedes-Benz Group vs. TIANDE CHEMICAL |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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