Correlation Between American Public and Mizuho Financial

Can any of the company-specific risk be diversified away by investing in both American Public and Mizuho Financial 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 American Public and Mizuho Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between American Public Education and Mizuho Financial Group, you can compare the effects of market volatilities on American Public and Mizuho Financial 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 American Public with a short position of Mizuho Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Public and Mizuho Financial.

Diversification Opportunities for American Public and Mizuho Financial

0.96

Correlation Coefficient

American Public  Mizuho Financial

Almost no diversification

The 3 months correlation between American and Mizuho is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding American Public Education and Mizuho Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mizuho Financial and American Public 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 American Public Education are associated (or correlated) with Mizuho Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mizuho Financial has no effect on the direction of American Public i.e., American Public and Mizuho Financial go up and down completely randomly.

Pair Corralation between American Public and Mizuho Financial

Assuming the 90 days horizon American Public Education is expected to generate 1.78 times more return on investment than Mizuho Financial. However, American Public is 1.78 times more volatile than Mizuho Financial Group. It trades about 0.28 of its potential returns per unit of risk. Mizuho Financial Group is currently generating about 0.23 per unit of risk. If you would invest  1,230  in American Public Education on October 4, 2024 and sell it today you would earn a total of  830.00  from holding American Public Education or generate 67.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

American Public Education  vs.  Mizuho Financial Group

American Public Education

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in American Public Education are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, American Public reported solid returns over the last few months and may actually be approaching a breakup point.

Mizuho Financial

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mizuho Financial Group are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Mizuho Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with American Public and Mizuho Financial

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

The idea behind American Public Education and Mizuho Financial Group 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 CEOs Directory module to screen CEOs from public companies around the world.