Correlation Between Amphenol and Mitsubishi Electric
Can any of the company-specific risk be diversified away by investing in both Amphenol and Mitsubishi Electric 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 Amphenol and Mitsubishi Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amphenol and Mitsubishi Electric, you can compare the effects of market volatilities on Amphenol and Mitsubishi Electric 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 Amphenol with a short position of Mitsubishi Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amphenol and Mitsubishi Electric.
Diversification Opportunities for Amphenol and Mitsubishi Electric
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amphenol and Mitsubishi is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Amphenol and Mitsubishi Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsubishi Electric and Amphenol 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 Amphenol are associated (or correlated) with Mitsubishi Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsubishi Electric has no effect on the direction of Amphenol i.e., Amphenol and Mitsubishi Electric go up and down completely randomly.
Pair Corralation between Amphenol and Mitsubishi Electric
Assuming the 90 days horizon Amphenol is expected to generate 0.72 times more return on investment than Mitsubishi Electric. However, Amphenol is 1.39 times less risky than Mitsubishi Electric. It trades about 0.14 of its potential returns per unit of risk. Mitsubishi Electric is currently generating about 0.09 per unit of risk. If you would invest 5,905 in Amphenol on September 24, 2024 and sell it today you would earn a total of 895.00 from holding Amphenol or generate 15.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Amphenol vs. Mitsubishi Electric
Performance |
Timeline |
Amphenol |
Mitsubishi Electric |
Amphenol and Mitsubishi Electric Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Amphenol and Mitsubishi Electric
The main advantage of trading using opposite Amphenol and Mitsubishi Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amphenol position performs unexpectedly, Mitsubishi Electric 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 Mitsubishi Electric will offset losses from the drop in Mitsubishi Electric's long position.Amphenol vs. Hon Hai Precision | Amphenol vs. Samsung SDI Co | Amphenol vs. Murata Manufacturing Co | Amphenol vs. Corning Incorporated |
Mitsubishi Electric vs. Amphenol | Mitsubishi Electric vs. Hon Hai Precision | Mitsubishi Electric vs. Samsung SDI Co | Mitsubishi Electric vs. Murata Manufacturing Co |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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