Correlation Between Mitsubishi Electric and Skanska AB

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

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

Diversification Opportunities for Mitsubishi Electric and Skanska AB

-0.17

Correlation Coefficient

Mitsubishi Electric  Skanska AB

Good diversification

The 3 months correlation between Mitsubishi and Skanska is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi Electric Corp and Skanska AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skanska AB ser and Mitsubishi Electric 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 Electric Corp are associated (or correlated) with Skanska AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skanska AB ser has no effect on the direction of Mitsubishi Electric i.e., Mitsubishi Electric and Skanska AB go up and down completely randomly.

Pair Corralation between Mitsubishi Electric and Skanska AB

Assuming the 90 days horizon Mitsubishi Electric Corp is expected to generate 1.18 times more return on investment than Skanska AB. However, Mitsubishi Electric is 1.18 times more volatile than Skanska AB ser. It trades about 0.17 of its potential returns per unit of risk. Skanska AB ser is currently generating about 0.0 per unit of risk. If you would invest  3,859  in Mitsubishi Electric Corp on May 7, 2025 and sell it today you would earn a total of  866.00  from holding Mitsubishi Electric Corp or generate 22.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Mitsubishi Electric Corp  vs.  Skanska AB ser

Mitsubishi Electric Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mitsubishi Electric Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile essential indicators, Mitsubishi Electric showed solid returns over the last few months and may actually be approaching a breakup point.

Skanska AB ser

Risk-Adjusted Performance

Weakest

Over the last 90 days Skanska AB ser has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Skanska AB is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mitsubishi Electric and Skanska AB

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

The idea behind Mitsubishi Electric Corp and Skanska AB ser 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 CEOs Directory module to screen CEOs from public companies around the world.