Correlation Between Micro Leasing and Mitsib Leasing

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

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

Diversification Opportunities for Micro Leasing and Mitsib Leasing

0.68

Correlation Coefficient

Micro Leasing  Mitsib Leasing

Poor diversification

The 3 months correlation between Micro and Mitsib is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Micro Leasing Public and Mitsib Leasing Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsib Leasing Public and Micro Leasing 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 Micro Leasing Public are associated (or correlated) with Mitsib Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsib Leasing Public has no effect on the direction of Micro Leasing i.e., Micro Leasing and Mitsib Leasing go up and down completely randomly.

Pair Corralation between Micro Leasing and Mitsib Leasing

Assuming the 90 days trading horizon Micro Leasing Public is expected to under-perform the Mitsib Leasing. But the stock apears to be less risky and, when comparing its historical volatility, Micro Leasing Public is 13.84 times less risky than Mitsib Leasing. The stock trades about -0.07 of its potential returns per unit of risk. The Mitsib Leasing Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  100.00  in Mitsib Leasing Public on September 12, 2024 and sell it today you would lose (27.00) from holding Mitsib Leasing Public or give up 27.0% of portfolio value over 90 days.

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

Micro Leasing Public  vs.  Mitsib Leasing Public

Micro Leasing Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Micro Leasing Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Mitsib Leasing Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mitsib Leasing Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Mitsib Leasing is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Micro Leasing and Mitsib Leasing

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

The idea behind Micro Leasing Public and Mitsib Leasing Public 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 Global Correlations module to find global opportunities by holding instruments from different markets.