Correlation Between MOBILE FACTORY and Hitachi Zosen

Can any of the company-specific risk be diversified away by investing in both MOBILE FACTORY and Hitachi Zosen 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 MOBILE FACTORY and Hitachi Zosen into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MOBILE FACTORY INC and Hitachi Zosen, you can compare the effects of market volatilities on MOBILE FACTORY and Hitachi Zosen 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 MOBILE FACTORY with a short position of Hitachi Zosen. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOBILE FACTORY and Hitachi Zosen.

Diversification Opportunities for MOBILE FACTORY and Hitachi Zosen

-0.56

Correlation Coefficient

MOBILE FACTORY  Hitachi Zosen

Excellent diversification

The 3 months correlation between MOBILE and Hitachi is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding MOBILE FACTORY INC and Hitachi Zosen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hitachi Zosen and MOBILE FACTORY 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 MOBILE FACTORY INC are associated (or correlated) with Hitachi Zosen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hitachi Zosen has no effect on the direction of MOBILE FACTORY i.e., MOBILE FACTORY and Hitachi Zosen go up and down completely randomly.

Pair Corralation between MOBILE FACTORY and Hitachi Zosen

Assuming the 90 days horizon MOBILE FACTORY INC is expected to under-perform the Hitachi Zosen. But the stock apears to be less risky and, when comparing its historical volatility, MOBILE FACTORY INC is 1.51 times less risky than Hitachi Zosen. The stock trades about -0.04 of its potential returns per unit of risk. The Hitachi Zosen is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  588.00  in Hitachi Zosen on October 9, 2024 and sell it today you would earn a total of  22.00  from holding Hitachi Zosen or generate 3.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	94.12%
Values	Daily Returns

MOBILE FACTORY INC  vs.  Hitachi Zosen

MOBILE FACTORY INC

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MOBILE FACTORY INC are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, MOBILE FACTORY reported solid returns over the last few months and may actually be approaching a breakup point.

Hitachi Zosen

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hitachi Zosen are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Hitachi Zosen is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with MOBILE FACTORY and Hitachi Zosen

The main advantage of trading using opposite MOBILE FACTORY and Hitachi Zosen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOBILE FACTORY position performs unexpectedly, Hitachi Zosen 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 Hitachi Zosen will offset losses from the drop in Hitachi Zosen's long position.

The idea behind MOBILE FACTORY INC and Hitachi Zosen 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.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.