Correlation Between Marubeni Corp and Marubeni

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

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

Diversification Opportunities for Marubeni Corp and Marubeni

0.56

Correlation Coefficient

Marubeni Corp  Marubeni

Very weak diversification

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

Pair Corralation between Marubeni Corp and Marubeni

Assuming the 90 days horizon Marubeni Corp ADR is expected to under-perform the Marubeni. But the pink sheet apears to be less risky and, when comparing its historical volatility, Marubeni Corp ADR is 2.46 times less risky than Marubeni. The pink sheet trades about -0.08 of its potential returns per unit of risk. The Marubeni is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,626  in Marubeni on September 3, 2024 and sell it today you would lose (38.00) from holding Marubeni or give up 2.34% of portfolio value over 90 days.

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

Marubeni Corp ADR  vs.  Marubeni

Marubeni Corp ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marubeni Corp ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Marubeni

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marubeni has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Marubeni is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Marubeni Corp and Marubeni

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

The idea behind Marubeni Corp ADR and Marubeni 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.