Correlation Between Corning Incorporated and Mitsubishi Estate

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

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

Diversification Opportunities for Corning Incorporated and Mitsubishi Estate

-0.33

Correlation Coefficient

Corning Incorporated  Mitsubishi Estate

Very good diversification

The 3 months correlation between Corning and Mitsubishi is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Corning Incorporated and Mitsubishi Estate Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsubishi Estate and Corning Incorporated 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 Corning Incorporated are associated (or correlated) with Mitsubishi Estate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsubishi Estate has no effect on the direction of Corning Incorporated i.e., Corning Incorporated and Mitsubishi Estate go up and down completely randomly.

Pair Corralation between Corning Incorporated and Mitsubishi Estate

Considering the 90-day investment horizon Corning Incorporated is expected to generate 0.47 times more return on investment than Mitsubishi Estate. However, Corning Incorporated is 2.12 times less risky than Mitsubishi Estate. It trades about 0.31 of its potential returns per unit of risk. Mitsubishi Estate Co is currently generating about -0.19 per unit of risk. If you would invest  3,391  in Corning Incorporated on March 11, 2024 and sell it today you would earn a total of  302.00  from holding Corning Incorporated or generate 8.91% return on investment over 90 days.

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

Corning Incorporated  vs.  Mitsubishi Estate Co

Corning Incorporated

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Corning Incorporated are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain essential indicators, Corning Incorporated showed solid returns over the last few months and may actually be approaching a breakup point.

Mitsubishi Estate

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mitsubishi Estate Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Mitsubishi Estate reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Corning Incorporated and Mitsubishi Estate

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

The idea behind Corning Incorporated and Mitsubishi Estate Co 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.