Correlation Between Mitsubishi Gas and Xinhua Winshare
Can any of the company-specific risk be diversified away by investing in both Mitsubishi Gas and Xinhua Winshare 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 Xinhua Winshare 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 Xinhua Winshare Publishing, you can compare the effects of market volatilities on Mitsubishi Gas and Xinhua Winshare 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 Xinhua Winshare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi Gas and Xinhua Winshare.
Diversification Opportunities for Mitsubishi Gas and Xinhua Winshare
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mitsubishi and Xinhua is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi Gas Chemical and Xinhua Winshare Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinhua Winshare Publ 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 Xinhua Winshare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinhua Winshare Publ has no effect on the direction of Mitsubishi Gas i.e., Mitsubishi Gas and Xinhua Winshare go up and down completely randomly.
Pair Corralation between Mitsubishi Gas and Xinhua Winshare
Assuming the 90 days trading horizon Mitsubishi Gas Chemical is expected to generate 0.59 times more return on investment than Xinhua Winshare. However, Mitsubishi Gas Chemical is 1.69 times less risky than Xinhua Winshare. It trades about -0.08 of its potential returns per unit of risk. Xinhua Winshare Publishing is currently generating about -0.22 per unit of risk. If you would invest 1,720 in Mitsubishi Gas Chemical on November 2, 2024 and sell it today you would lose (40.00) from holding Mitsubishi Gas Chemical or give up 2.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitsubishi Gas Chemical vs. Xinhua Winshare Publishing
Performance |
| Timeline |
| Mitsubishi Gas Chemical |
| Xinhua Winshare Publ |
Mitsubishi Gas and Xinhua Winshare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsubishi Gas and Xinhua Winshare
The main advantage of trading using opposite Mitsubishi Gas and Xinhua Winshare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi Gas position performs unexpectedly, Xinhua Winshare 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 Xinhua Winshare will offset losses from the drop in Xinhua Winshare's long position.| Mitsubishi Gas vs. CALTAGIRONE EDITORE | Mitsubishi Gas vs. Alaska Air Group | Mitsubishi Gas vs. Khiron Life Sciences | Mitsubishi Gas vs. MOUNT GIBSON IRON |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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