Correlation Between Mitsui Fudosan and Goodman

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

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

Diversification Opportunities for Mitsui Fudosan and Goodman

0.35

Correlation Coefficient

Mitsui Fudosan  Goodman

Weak diversification

The 3 months correlation between Mitsui and Goodman is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Mitsui Fudosan Co and Goodman Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodman Group and Mitsui Fudosan 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 Mitsui Fudosan Co are associated (or correlated) with Goodman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodman Group has no effect on the direction of Mitsui Fudosan i.e., Mitsui Fudosan and Goodman go up and down completely randomly.

Pair Corralation between Mitsui Fudosan and Goodman

Assuming the 90 days horizon Mitsui Fudosan Co is expected to under-perform the Goodman. But the pink sheet apears to be less risky and, when comparing its historical volatility, Mitsui Fudosan Co is 2.82 times less risky than Goodman. The pink sheet trades about -0.03 of its potential returns per unit of risk. The Goodman Group is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  2,477  in Goodman Group on October 26, 2024 and sell it today you would lose (95.00) from holding Goodman Group or give up 3.84% of portfolio value over 90 days.

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

Mitsui Fudosan Co  vs.  Goodman Group

Mitsui Fudosan

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mitsui Fudosan Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Mitsui Fudosan is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Goodman Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Mitsui Fudosan and Goodman

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

The idea behind Mitsui Fudosan Co and Goodman Group 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.