Correlation Between Mizuho Financial and LyondellBasell Industries
Can any of the company-specific risk be diversified away by investing in both Mizuho Financial and LyondellBasell Industries 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 Mizuho Financial and LyondellBasell Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mizuho Financial Group and LyondellBasell Industries NV, you can compare the effects of market volatilities on Mizuho Financial and LyondellBasell Industries 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 Mizuho Financial with a short position of LyondellBasell Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mizuho Financial and LyondellBasell Industries.
Diversification Opportunities for Mizuho Financial and LyondellBasell Industries
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mizuho and LyondellBasell is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Mizuho Financial Group and LyondellBasell Industries NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LyondellBasell Industries and Mizuho Financial 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 Mizuho Financial Group are associated (or correlated) with LyondellBasell Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LyondellBasell Industries has no effect on the direction of Mizuho Financial i.e., Mizuho Financial and LyondellBasell Industries go up and down completely randomly.
Pair Corralation between Mizuho Financial and LyondellBasell Industries
Assuming the 90 days trading horizon Mizuho Financial Group is expected to generate 0.98 times more return on investment than LyondellBasell Industries. However, Mizuho Financial Group is 1.02 times less risky than LyondellBasell Industries. It trades about 0.4 of its potential returns per unit of risk. LyondellBasell Industries NV is currently generating about -0.02 per unit of risk. If you would invest 378.00 in Mizuho Financial Group on August 30, 2024 and sell it today you would earn a total of 76.00 from holding Mizuho Financial Group or generate 20.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mizuho Financial Group vs. LyondellBasell Industries NV
Performance |
| Timeline |
| Mizuho Financial |
| LyondellBasell Industries |
Mizuho Financial and LyondellBasell Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mizuho Financial and LyondellBasell Industries
The main advantage of trading using opposite Mizuho Financial and LyondellBasell Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mizuho Financial position performs unexpectedly, LyondellBasell Industries 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 LyondellBasell Industries will offset losses from the drop in LyondellBasell Industries' long position.| Mizuho Financial vs. Dairy Farm International | Mizuho Financial vs. NIPPON MEAT PACKERS | Mizuho Financial vs. MARKET VECTR RETAIL | Mizuho Financial vs. Fast Retailing Co |
| LyondellBasell Industries vs. Linde plc | LyondellBasell Industries vs. Superior Plus Corp | LyondellBasell Industries vs. NMI Holdings | LyondellBasell Industries vs. SIVERS SEMICONDUCTORS AB |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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