Correlation Between Marubeni Corp and Rjd Green

Can any of the company-specific risk be diversified away by investing in both Marubeni Corp and Rjd Green 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 Rjd Green 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 Rjd Green, you can compare the effects of market volatilities on Marubeni Corp and Rjd Green 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 Rjd Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marubeni Corp and Rjd Green.

Diversification Opportunities for Marubeni Corp and Rjd Green

-0.55

Correlation Coefficient

Marubeni Corp  Rjd Green

Excellent diversification

The 3 months correlation between Marubeni and Rjd is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Marubeni Corp ADR and Rjd Green in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rjd Green 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 Rjd Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rjd Green has no effect on the direction of Marubeni Corp i.e., Marubeni Corp and Rjd Green go up and down completely randomly.

Pair Corralation between Marubeni Corp and Rjd Green

Assuming the 90 days horizon Marubeni Corp is expected to generate 3.39 times less return on investment than Rjd Green. But when comparing it to its historical volatility, Marubeni Corp ADR is 4.76 times less risky than Rjd Green. It trades about 0.11 of its potential returns per unit of risk. Rjd Green is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  0.66  in Rjd Green on December 28, 2024 and sell it today you would earn a total of  0.13  from holding Rjd Green or generate 19.7% return on investment over 90 days.

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

Marubeni Corp ADR  vs.  Rjd Green

Marubeni Corp ADR

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Marubeni Corp ADR are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Marubeni Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Rjd Green

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Rjd Green are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting fundamental indicators, Rjd Green reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Marubeni Corp and Rjd Green

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

The idea behind Marubeni Corp ADR and Rjd Green 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.