Correlation Between Mitsubishi Gas and UNITED UTILITIES
Can any of the company-specific risk be diversified away by investing in both Mitsubishi Gas and UNITED UTILITIES 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 UNITED UTILITIES 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 UNITED UTILITIES GR, you can compare the effects of market volatilities on Mitsubishi Gas and UNITED UTILITIES 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 UNITED UTILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi Gas and UNITED UTILITIES.
Diversification Opportunities for Mitsubishi Gas and UNITED UTILITIES
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mitsubishi and UNITED is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi Gas Chemical and UNITED UTILITIES GR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITED UTILITIES 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 UNITED UTILITIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNITED UTILITIES has no effect on the direction of Mitsubishi Gas i.e., Mitsubishi Gas and UNITED UTILITIES go up and down completely randomly.
Pair Corralation between Mitsubishi Gas and UNITED UTILITIES
Assuming the 90 days trading horizon Mitsubishi Gas is expected to generate 2.0 times less return on investment than UNITED UTILITIES. In addition to that, Mitsubishi Gas is 1.35 times more volatile than UNITED UTILITIES GR. It trades about 0.03 of its total potential returns per unit of risk. UNITED UTILITIES GR is currently generating about 0.09 per unit of volatility. If you would invest 1,142 in UNITED UTILITIES GR on September 3, 2024 and sell it today you would earn a total of 198.00 from holding UNITED UTILITIES GR or generate 17.34% 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. UNITED UTILITIES GR
Performance |
| Timeline |
| Mitsubishi Gas Chemical |
| UNITED UTILITIES |
Mitsubishi Gas and UNITED UTILITIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsubishi Gas and UNITED UTILITIES
The main advantage of trading using opposite Mitsubishi Gas and UNITED UTILITIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi Gas position performs unexpectedly, UNITED UTILITIES 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 UNITED UTILITIES will offset losses from the drop in UNITED UTILITIES's long position.| Mitsubishi Gas vs. Apple Inc | Mitsubishi Gas vs. Apple Inc | Mitsubishi Gas vs. Apple Inc | Mitsubishi Gas vs. Apple Inc |
| UNITED UTILITIES vs. ANTA SPORTS PRODUCT | UNITED UTILITIES vs. Transport International Holdings | UNITED UTILITIES vs. Sqs Software Quality | UNITED UTILITIES vs. PSI Software AG |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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