Correlation Between Mitsubishi Gas and Universal Entertainment
Can any of the company-specific risk be diversified away by investing in both Mitsubishi Gas and Universal Entertainment 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 Universal Entertainment 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 Universal Entertainment, you can compare the effects of market volatilities on Mitsubishi Gas and Universal Entertainment 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 Universal Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi Gas and Universal Entertainment.
Diversification Opportunities for Mitsubishi Gas and Universal Entertainment
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mitsubishi and Universal is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi Gas Chemical and Universal Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Entertainment 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 Universal Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Entertainment has no effect on the direction of Mitsubishi Gas i.e., Mitsubishi Gas and Universal Entertainment go up and down completely randomly.
Pair Corralation between Mitsubishi Gas and Universal Entertainment
Assuming the 90 days trading horizon Mitsubishi Gas Chemical is expected to generate 0.4 times more return on investment than Universal Entertainment. However, Mitsubishi Gas Chemical is 2.48 times less risky than Universal Entertainment. It trades about 0.02 of its potential returns per unit of risk. Universal Entertainment is currently generating about -0.07 per unit of risk. If you would invest 1,690 in Mitsubishi Gas Chemical on October 24, 2024 and sell it today you would earn a total of 20.00 from holding Mitsubishi Gas Chemical or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitsubishi Gas Chemical vs. Universal Entertainment
Performance |
| Timeline |
| Mitsubishi Gas Chemical |
| Universal Entertainment |
Mitsubishi Gas and Universal Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsubishi Gas and Universal Entertainment
The main advantage of trading using opposite Mitsubishi Gas and Universal Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi Gas position performs unexpectedly, Universal Entertainment 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 Universal Entertainment will offset losses from the drop in Universal Entertainment's long position.| Mitsubishi Gas vs. Applied Materials | Mitsubishi Gas vs. Vienna Insurance Group | Mitsubishi Gas vs. EAGLE MATERIALS | Mitsubishi Gas vs. Compagnie Plastic Omnium |
| Universal Entertainment vs. Cars Inc | Universal Entertainment vs. Sunstone Hotel Investors | Universal Entertainment vs. Summit Hotel Properties | Universal Entertainment vs. CARSALESCOM |
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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