Correlation Between Mountainview Energy and Obayashi

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

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

Diversification Opportunities for Mountainview Energy and Obayashi

0.0

Correlation Coefficient

Mountainview Energy  Obayashi

Pay attention - limited upside

The 3 months correlation between Mountainview and Obayashi is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mountainview Energy and Obayashi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Obayashi and Mountainview Energy 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 Mountainview Energy are associated (or correlated) with Obayashi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Obayashi has no effect on the direction of Mountainview Energy i.e., Mountainview Energy and Obayashi go up and down completely randomly.

Pair Corralation between Mountainview Energy and Obayashi

If you would invest  1,108  in Obayashi on September 23, 2024 and sell it today you would earn a total of  212.00  from holding Obayashi or generate 19.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.48%
Values	Daily Returns

Mountainview Energy  vs.  Obayashi

Mountainview Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mountainview Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Mountainview Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Obayashi

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Obayashi are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating fundamental indicators, Obayashi reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mountainview Energy and Obayashi

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

The idea behind Mountainview Energy and Obayashi 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.