Correlation Between Mitsubishi Gas and NORWEGIAN AIR
Can any of the company-specific risk be diversified away by investing in both Mitsubishi Gas and NORWEGIAN AIR 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 NORWEGIAN AIR 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 NORWEGIAN AIR SHUT, you can compare the effects of market volatilities on Mitsubishi Gas and NORWEGIAN AIR 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 NORWEGIAN AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi Gas and NORWEGIAN AIR.
Diversification Opportunities for Mitsubishi Gas and NORWEGIAN AIR
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mitsubishi and NORWEGIAN is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi Gas Chemical and NORWEGIAN AIR SHUT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORWEGIAN AIR SHUT 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 NORWEGIAN AIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORWEGIAN AIR SHUT has no effect on the direction of Mitsubishi Gas i.e., Mitsubishi Gas and NORWEGIAN AIR go up and down completely randomly.
Pair Corralation between Mitsubishi Gas and NORWEGIAN AIR
Assuming the 90 days trading horizon Mitsubishi Gas is expected to generate 1.39 times less return on investment than NORWEGIAN AIR. But when comparing it to its historical volatility, Mitsubishi Gas Chemical is 1.74 times less risky than NORWEGIAN AIR. It trades about 0.02 of its potential returns per unit of risk. NORWEGIAN AIR SHUT is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 92.00 in NORWEGIAN AIR SHUT on November 28, 2024 and sell it today you would earn a total of 4.00 from holding NORWEGIAN AIR SHUT or generate 4.35% 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. NORWEGIAN AIR SHUT
Performance |
| Timeline |
| Mitsubishi Gas Chemical |
| NORWEGIAN AIR SHUT |
Mitsubishi Gas and NORWEGIAN AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsubishi Gas and NORWEGIAN AIR
The main advantage of trading using opposite Mitsubishi Gas and NORWEGIAN AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi Gas position performs unexpectedly, NORWEGIAN AIR 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 NORWEGIAN AIR will offset losses from the drop in NORWEGIAN AIR's long position.| Mitsubishi Gas vs. Major Drilling Group | Mitsubishi Gas vs. ADRIATIC METALS LS 013355 | Mitsubishi Gas vs. AEON METALS LTD | Mitsubishi Gas vs. LI METAL P |
| NORWEGIAN AIR vs. Perseus Mining Limited | NORWEGIAN AIR vs. Jacquet Metal Service | NORWEGIAN AIR vs. PKSHA TECHNOLOGY INC | NORWEGIAN AIR vs. Firan Technology Group |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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