Correlation Between Mizuho Financial and Adyen NV
Can any of the company-specific risk be diversified away by investing in both Mizuho Financial and Adyen NV 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 Adyen NV 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 Adyen NV, you can compare the effects of market volatilities on Mizuho Financial and Adyen NV 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 Adyen NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mizuho Financial and Adyen NV.
Diversification Opportunities for Mizuho Financial and Adyen NV
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mizuho and Adyen is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Mizuho Financial Group and Adyen NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adyen NV 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 Adyen NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adyen NV has no effect on the direction of Mizuho Financial i.e., Mizuho Financial and Adyen NV go up and down completely randomly.
Pair Corralation between Mizuho Financial and Adyen NV
Assuming the 90 days horizon Mizuho Financial Group is expected to generate 1.01 times more return on investment than Adyen NV. However, Mizuho Financial is 1.01 times more volatile than Adyen NV. It trades about 0.08 of its potential returns per unit of risk. Adyen NV is currently generating about 0.04 per unit of risk. If you would invest 1,996 in Mizuho Financial Group on September 3, 2024 and sell it today you would earn a total of 589.00 from holding Mizuho Financial Group or generate 29.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mizuho Financial Group vs. Adyen NV
Performance |
| Timeline |
| Mizuho Financial |
| Adyen NV |
Mizuho Financial and Adyen NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mizuho Financial and Adyen NV
The main advantage of trading using opposite Mizuho Financial and Adyen NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mizuho Financial position performs unexpectedly, Adyen NV 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 Adyen NV will offset losses from the drop in Adyen NV's long position.| Mizuho Financial vs. First Hawaiian | Mizuho Financial vs. Central Pacific Financial | Mizuho Financial vs. Territorial Bancorp | Mizuho Financial vs. Comerica |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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