Correlation Between SM Prime and Mitsui Fudosan
Can any of the company-specific risk be diversified away by investing in both SM Prime and Mitsui Fudosan 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 SM Prime and Mitsui Fudosan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SM Prime Holdings and Mitsui Fudosan Co, you can compare the effects of market volatilities on SM Prime and Mitsui Fudosan 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 SM Prime with a short position of Mitsui Fudosan. Check out your portfolio center. Please also check ongoing floating volatility patterns of SM Prime and Mitsui Fudosan.
Diversification Opportunities for SM Prime and Mitsui Fudosan
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SPHXF and Mitsui is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SM Prime Holdings and Mitsui Fudosan Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsui Fudosan and SM Prime 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 SM Prime Holdings are associated (or correlated) with Mitsui Fudosan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsui Fudosan has no effect on the direction of SM Prime i.e., SM Prime and Mitsui Fudosan go up and down completely randomly.
Pair Corralation between SM Prime and Mitsui Fudosan
Assuming the 90 days horizon SM Prime Holdings is expected to generate 5.23 times more return on investment than Mitsui Fudosan. However, SM Prime is 5.23 times more volatile than Mitsui Fudosan Co. It trades about 0.07 of its potential returns per unit of risk. Mitsui Fudosan Co is currently generating about 0.01 per unit of risk. If you would invest 22.00 in SM Prime Holdings on September 2, 2024 and sell it today you would earn a total of 24.00 from holding SM Prime Holdings or generate 109.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 70.97% |
| Values | Daily Returns |
SM Prime Holdings vs. Mitsui Fudosan Co
Performance |
| Timeline |
| SM Prime Holdings |
| Mitsui Fudosan |
SM Prime and Mitsui Fudosan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SM Prime and Mitsui Fudosan
The main advantage of trading using opposite SM Prime and Mitsui Fudosan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SM Prime position performs unexpectedly, Mitsui Fudosan 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 Mitsui Fudosan will offset losses from the drop in Mitsui Fudosan's long position.The idea behind SM Prime Holdings and Mitsui Fudosan Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Mitsui Fudosan vs. St Joe Company | Mitsui Fudosan vs. Stratus Properties | Mitsui Fudosan vs. New World Development |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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