Correlation Between MEBUKI FINANCIAL and Rock Tech

Can any of the company-specific risk be diversified away by investing in both MEBUKI FINANCIAL and Rock Tech 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 MEBUKI FINANCIAL and Rock Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MEBUKI FINANCIAL GROUP and Rock Tech Lithium, you can compare the effects of market volatilities on MEBUKI FINANCIAL and Rock Tech 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 MEBUKI FINANCIAL with a short position of Rock Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEBUKI FINANCIAL and Rock Tech.

Diversification Opportunities for MEBUKI FINANCIAL and Rock Tech

-0.27

Correlation Coefficient

MEBUKI FINANCIAL  Rock Tech

Very good diversification

The 3 months correlation between MEBUKI and Rock is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding MEBUKI FINANCIAL GROUP and Rock Tech Lithium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rock Tech Lithium and MEBUKI 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 MEBUKI FINANCIAL GROUP are associated (or correlated) with Rock Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rock Tech Lithium has no effect on the direction of MEBUKI FINANCIAL i.e., MEBUKI FINANCIAL and Rock Tech go up and down completely randomly.

Pair Corralation between MEBUKI FINANCIAL and Rock Tech

Assuming the 90 days horizon MEBUKI FINANCIAL GROUP is expected to generate 0.32 times more return on investment than Rock Tech. However, MEBUKI FINANCIAL GROUP is 3.15 times less risky than Rock Tech. It trades about 0.16 of its potential returns per unit of risk. Rock Tech Lithium is currently generating about 0.03 per unit of risk. If you would invest  384.00  in MEBUKI FINANCIAL GROUP on December 26, 2024 and sell it today you would earn a total of  68.00  from holding MEBUKI FINANCIAL GROUP or generate 17.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

MEBUKI FINANCIAL GROUP  vs.  Rock Tech Lithium

MEBUKI FINANCIAL

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MEBUKI FINANCIAL GROUP are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, MEBUKI FINANCIAL reported solid returns over the last few months and may actually be approaching a breakup point.

Rock Tech Lithium

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Rock Tech Lithium are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady forward indicators, Rock Tech may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with MEBUKI FINANCIAL and Rock Tech

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

The idea behind MEBUKI FINANCIAL GROUP and Rock Tech Lithium 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.