Correlation Between Mizuno and Mueller Industries

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

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

Diversification Opportunities for Mizuno and Mueller Industries

-0.79

Correlation Coefficient

Mizuno  Mueller Industries

Pay attention - limited upside

The 3 months correlation between Mizuno and Mueller is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Mizuno and Mueller Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mueller Industries and Mizuno 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 Mizuno are associated (or correlated) with Mueller Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mueller Industries has no effect on the direction of Mizuno i.e., Mizuno and Mueller Industries go up and down completely randomly.

Pair Corralation between Mizuno and Mueller Industries

Assuming the 90 days horizon Mizuno is expected to generate 0.96 times more return on investment than Mueller Industries. However, Mizuno is 1.04 times less risky than Mueller Industries. It trades about 0.37 of its potential returns per unit of risk. Mueller Industries is currently generating about -0.15 per unit of risk. If you would invest  4,400  in Mizuno on September 13, 2024 and sell it today you would earn a total of  1,000.00  from holding Mizuno or generate 22.73% return on investment over 90 days.

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

Mizuno  vs.  Mueller Industries

Mizuno

Risk-Adjusted Performance

0 of 100

Very Weak

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

Mueller Industries

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mueller Industries are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Mueller Industries reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mizuno and Mueller Industries

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

The idea behind Mizuno and Mueller Industries 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.