Correlation Between Mitsubishi Heavy and Siemens AG

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Mitsubishi Heavy and Siemens AG 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 Mitsubishi Heavy and Siemens AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsubishi Heavy Industries and Siemens AG Class, you can compare the effects of market volatilities on Mitsubishi Heavy and Siemens AG 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 Mitsubishi Heavy with a short position of Siemens AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi Heavy and Siemens AG.

Diversification Opportunities for Mitsubishi Heavy and Siemens AG

0.59
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Mitsubishi and Siemens is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi Heavy Industries and Siemens AG Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens AG Class and Mitsubishi Heavy 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 Mitsubishi Heavy Industries are associated (or correlated) with Siemens AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siemens AG Class has no effect on the direction of Mitsubishi Heavy i.e., Mitsubishi Heavy and Siemens AG go up and down completely randomly.

Pair Corralation between Mitsubishi Heavy and Siemens AG

Assuming the 90 days horizon Mitsubishi Heavy Industries is expected to under-perform the Siemens AG. In addition to that, Mitsubishi Heavy is 9.78 times more volatile than Siemens AG Class. It trades about -0.17 of its total potential returns per unit of risk. Siemens AG Class is currently generating about 0.04 per unit of volatility. If you would invest  18,915  in Siemens AG Class on December 29, 2023 and sell it today you would earn a total of  216.00  from holding Siemens AG Class or generate 1.14% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy95.65%
ValuesDaily Returns

Mitsubishi Heavy Industries  vs.  Siemens AG Class

 Performance 
       Timeline  
Mitsubishi Heavy Ind 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Strong
Over the last 90 days Mitsubishi Heavy Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
Siemens AG Class 

Risk-Adjusted Performance

4 of 100

 
Low
 
High
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Siemens AG Class are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Siemens AG is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Mitsubishi Heavy and Siemens AG Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Mitsubishi Heavy and Siemens AG

The main advantage of trading using opposite Mitsubishi Heavy and Siemens AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi Heavy position performs unexpectedly, Siemens AG 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 Siemens AG will offset losses from the drop in Siemens AG's long position.
The idea behind Mitsubishi Heavy Industries and Siemens AG Class 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

Other Complementary Tools

Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Global Correlations
Find global opportunities by holding instruments from different markets
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Share Portfolio
Track or share privately all of your investments from the convenience of any device
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes