Correlation Between Mitsubishi Gas and Nufarm
Can any of the company-specific risk be diversified away by investing in both Mitsubishi Gas and Nufarm 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 Nufarm 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 Nufarm Limited, you can compare the effects of market volatilities on Mitsubishi Gas and Nufarm 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 Nufarm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi Gas and Nufarm.
Diversification Opportunities for Mitsubishi Gas and Nufarm
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mitsubishi and Nufarm is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi Gas Chemical and Nufarm Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nufarm Limited 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 Nufarm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nufarm Limited has no effect on the direction of Mitsubishi Gas i.e., Mitsubishi Gas and Nufarm go up and down completely randomly.
Pair Corralation between Mitsubishi Gas and Nufarm
Assuming the 90 days trading horizon Mitsubishi Gas Chemical is expected to generate 0.59 times more return on investment than Nufarm. However, Mitsubishi Gas Chemical is 1.68 times less risky than Nufarm. It trades about 0.37 of its potential returns per unit of risk. Nufarm Limited is currently generating about 0.17 per unit of risk. If you would invest 1,590 in Mitsubishi Gas Chemical on August 30, 2024 and sell it today you would earn a total of 170.00 from holding Mitsubishi Gas Chemical or generate 10.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitsubishi Gas Chemical vs. Nufarm Limited
Performance |
| Timeline |
| Mitsubishi Gas Chemical |
| Nufarm Limited |
Mitsubishi Gas and Nufarm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsubishi Gas and Nufarm
The main advantage of trading using opposite Mitsubishi Gas and Nufarm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi Gas position performs unexpectedly, Nufarm 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 Nufarm will offset losses from the drop in Nufarm's long position.| Mitsubishi Gas vs. Apple Inc | Mitsubishi Gas vs. Apple Inc | Mitsubishi Gas vs. Apple Inc | Mitsubishi Gas vs. Apple Inc |
| Nufarm vs. Superior Plus Corp | Nufarm vs. NMI Holdings | Nufarm vs. Origin Agritech | Nufarm vs. SIVERS SEMICONDUCTORS AB |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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