Correlation Between Atkore International and Mitsubishi Electric

Can any of the company-specific risk be diversified away by investing in both Atkore International and Mitsubishi Electric 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 Atkore International and Mitsubishi Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Atkore International Group and Mitsubishi Electric Corp, you can compare the effects of market volatilities on Atkore International and Mitsubishi Electric 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 Atkore International with a short position of Mitsubishi Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atkore International and Mitsubishi Electric.

Diversification Opportunities for Atkore International and Mitsubishi Electric

0.56

Correlation Coefficient

Atkore International  Mitsubishi Electric

Very weak diversification

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

Pair Corralation between Atkore International and Mitsubishi Electric

Given the investment horizon of 90 days Atkore International is expected to generate 3.36 times less return on investment than Mitsubishi Electric. In addition to that, Atkore International is 1.33 times more volatile than Mitsubishi Electric Corp. It trades about 0.01 of its total potential returns per unit of risk. Mitsubishi Electric Corp is currently generating about 0.04 per unit of volatility. If you would invest  3,296  in Mitsubishi Electric Corp on September 15, 2024 and sell it today you would earn a total of  155.00  from holding Mitsubishi Electric Corp or generate 4.7% return on investment over 90 days.

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

Atkore International Group  vs.  Mitsubishi Electric Corp

Atkore International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atkore International Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward-looking signals, Atkore International is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Mitsubishi Electric Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mitsubishi Electric Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong essential indicators, Mitsubishi Electric is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Atkore International and Mitsubishi Electric

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

The idea behind Atkore International Group and Mitsubishi Electric Corp 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.

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.