Correlation Between Toshiba and Marubeni

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

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

Diversification Opportunities for Toshiba and Marubeni

0.0

Correlation Coefficient

Toshiba  Marubeni

Pay attention - limited upside

The 3 months correlation between Toshiba and Marubeni is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Toshiba and Marubeni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marubeni and Toshiba 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 Toshiba are associated (or correlated) with Marubeni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marubeni has no effect on the direction of Toshiba i.e., Toshiba and Marubeni go up and down completely randomly.

Pair Corralation between Toshiba and Marubeni

If you would invest  1,470  in Marubeni on December 30, 2024 and sell it today you would earn a total of  207.00  from holding Marubeni or generate 14.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Toshiba  vs.  Marubeni

Toshiba

Risk-Adjusted Performance

Very Weak

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

Marubeni

Risk-Adjusted Performance

Modest

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

Pair Trading with Toshiba and Marubeni

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

The idea behind Toshiba and Marubeni 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.