Correlation Between Mitsubishi Electric and Conair

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

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

Diversification Opportunities for Mitsubishi Electric and Conair

-0.06

Correlation Coefficient

Mitsubishi Electric  Conair

Good diversification

The 3 months correlation between Mitsubishi and Conair is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi Electric Corp and Conair in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conair and Mitsubishi Electric 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 Mitsubishi Electric Corp are associated (or correlated) with Conair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conair has no effect on the direction of Mitsubishi Electric i.e., Mitsubishi Electric and Conair go up and down completely randomly.

Pair Corralation between Mitsubishi Electric and Conair

Assuming the 90 days horizon Mitsubishi Electric Corp is expected to generate 1.23 times more return on investment than Conair. However, Mitsubishi Electric is 1.23 times more volatile than Conair. It trades about 0.1 of its potential returns per unit of risk. Conair is currently generating about -0.18 per unit of risk. If you would invest  3,027  in Mitsubishi Electric Corp on October 25, 2024 and sell it today you would earn a total of  371.00  from holding Mitsubishi Electric Corp or generate 12.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.65%
Values	Daily Returns

Mitsubishi Electric Corp  vs.  Conair

Mitsubishi Electric Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mitsubishi Electric Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Mitsubishi Electric showed solid returns over the last few months and may actually be approaching a breakup point.

Conair

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Conair has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Mitsubishi Electric and Conair

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

The idea behind Mitsubishi Electric Corp and Conair 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.