Correlation Between Mizuho Financial and Metacrine

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

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

Diversification Opportunities for Mizuho Financial and Metacrine

-0.27

Correlation Coefficient

Mizuho Financial  Metacrine

Very good diversification

The 3 months correlation between Mizuho and Metacrine is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Mizuho Financial Group and Metacrine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metacrine and Mizuho Financial 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 Mizuho Financial Group are associated (or correlated) with Metacrine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metacrine has no effect on the direction of Mizuho Financial i.e., Mizuho Financial and Metacrine go up and down completely randomly.

Pair Corralation between Mizuho Financial and Metacrine

If you would invest  1,379  in Mizuho Financial Group on October 24, 2024 and sell it today you would earn a total of  1,121  from holding Mizuho Financial Group or generate 81.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	0.24%
Values	Daily Returns

Mizuho Financial Group  vs.  Metacrine

Mizuho Financial

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mizuho Financial Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Mizuho Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Metacrine

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Metacrine has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Metacrine is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Mizuho Financial and Metacrine

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

The idea behind Mizuho Financial Group and Metacrine 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.