Correlation Between Sun Hung and Mitsubishi Estate
Can any of the company-specific risk be diversified away by investing in both Sun Hung and Mitsubishi Estate 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 Sun Hung and Mitsubishi Estate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sun Hung Kai and Mitsubishi Estate Co, you can compare the effects of market volatilities on Sun Hung and Mitsubishi Estate 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 Sun Hung with a short position of Mitsubishi Estate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Hung and Mitsubishi Estate.
Diversification Opportunities for Sun Hung and Mitsubishi Estate
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sun and Mitsubishi is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Sun Hung Kai and Mitsubishi Estate Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsubishi Estate and Sun Hung 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 Sun Hung Kai are associated (or correlated) with Mitsubishi Estate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsubishi Estate has no effect on the direction of Sun Hung i.e., Sun Hung and Mitsubishi Estate go up and down completely randomly.
Pair Corralation between Sun Hung and Mitsubishi Estate
Assuming the 90 days horizon Sun Hung Kai is expected to generate 1.65 times more return on investment than Mitsubishi Estate. However, Sun Hung is 1.65 times more volatile than Mitsubishi Estate Co. It trades about 0.05 of its potential returns per unit of risk. Mitsubishi Estate Co is currently generating about 0.03 per unit of risk. If you would invest 474.00 in Sun Hung Kai on November 2, 2024 and sell it today you would earn a total of 381.00 from holding Sun Hung Kai or generate 80.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Sun Hung Kai vs. Mitsubishi Estate Co
Performance |
| Timeline |
| Sun Hung Kai |
| Mitsubishi Estate |
Sun Hung and Mitsubishi Estate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Hung and Mitsubishi Estate
The main advantage of trading using opposite Sun Hung and Mitsubishi Estate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Hung position performs unexpectedly, Mitsubishi Estate 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 Mitsubishi Estate will offset losses from the drop in Mitsubishi Estate's long position.| Sun Hung vs. PKSHA TECHNOLOGY INC | Sun Hung vs. SAFEROADS HLDGS | Sun Hung vs. TITANIUM TRANSPORTGROUP | Sun Hung vs. Kingdee International Software |
| Mitsubishi Estate vs. TEXAS ROADHOUSE | Mitsubishi Estate vs. CarsalesCom | Mitsubishi Estate vs. SALESFORCE INC CDR | Mitsubishi Estate vs. Salesforce |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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