Correlation Between Mitsubishi Materials and Bilfinger
Can any of the company-specific risk be diversified away by investing in both Mitsubishi Materials and Bilfinger 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 Materials and Bilfinger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsubishi Materials and Bilfinger SE, you can compare the effects of market volatilities on Mitsubishi Materials and Bilfinger 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 Materials with a short position of Bilfinger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi Materials and Bilfinger.
Diversification Opportunities for Mitsubishi Materials and Bilfinger
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Mitsubishi and Bilfinger is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi Materials and Bilfinger SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bilfinger SE and Mitsubishi Materials 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 Materials are associated (or correlated) with Bilfinger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bilfinger SE has no effect on the direction of Mitsubishi Materials i.e., Mitsubishi Materials and Bilfinger go up and down completely randomly.
Pair Corralation between Mitsubishi Materials and Bilfinger
Assuming the 90 days trading horizon Mitsubishi Materials is expected to generate 1122.5 times less return on investment than Bilfinger. But when comparing it to its historical volatility, Mitsubishi Materials is 1.24 times less risky than Bilfinger. It trades about 0.0 of its potential returns per unit of risk. Bilfinger SE is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 4,580 in Bilfinger SE on December 4, 2024 and sell it today you would earn a total of 1,330 from holding Bilfinger SE or generate 29.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitsubishi Materials vs. Bilfinger SE
Performance |
| Timeline |
| Mitsubishi Materials |
| Bilfinger SE |
Mitsubishi Materials and Bilfinger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsubishi Materials and Bilfinger
The main advantage of trading using opposite Mitsubishi Materials and Bilfinger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi Materials position performs unexpectedly, Bilfinger 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 Bilfinger will offset losses from the drop in Bilfinger's long position.| Mitsubishi Materials vs. Harmony Gold Mining | Mitsubishi Materials vs. ADRIATIC METALS LS 013355 | Mitsubishi Materials vs. De Grey Mining | Mitsubishi Materials vs. Jacquet Metal Service |
| Bilfinger vs. Vinci S A | Bilfinger vs. Johnson Controls International | Bilfinger vs. Larsen Toubro Limited | Bilfinger vs. China Railway 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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