Correlation Between Gaucho Group and Mitsui Fudosan

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

By analyzing existing cross correlation between Gaucho Group Holdings and Mitsui Fudosan Co, you can compare the effects of market volatilities on Gaucho Group and Mitsui Fudosan 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 Gaucho Group with a short position of Mitsui Fudosan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaucho Group and Mitsui Fudosan.

Diversification Opportunities for Gaucho Group and Mitsui Fudosan

0.56

Correlation Coefficient

Gaucho Group  Mitsui Fudosan

Very weak diversification

The 3 months correlation between Gaucho and Mitsui is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Gaucho Group Holdings and Mitsui Fudosan Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsui Fudosan and Gaucho Group 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 Gaucho Group Holdings are associated (or correlated) with Mitsui Fudosan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsui Fudosan has no effect on the direction of Gaucho Group i.e., Gaucho Group and Mitsui Fudosan go up and down completely randomly.

Pair Corralation between Gaucho Group and Mitsui Fudosan

Given the investment horizon of 90 days Gaucho Group Holdings is expected to under-perform the Mitsui Fudosan. In addition to that, Gaucho Group is 10.07 times more volatile than Mitsui Fudosan Co. It trades about -0.02 of its total potential returns per unit of risk. Mitsui Fudosan Co is currently generating about 0.05 per unit of volatility. If you would invest  1,683  in Mitsui Fudosan Co on September 14, 2024 and sell it today you would earn a total of  745.00  from holding Mitsui Fudosan Co or generate 44.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	97.77%
Values	Daily Returns

Gaucho Group Holdings  vs.  Mitsui Fudosan Co

Gaucho Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gaucho Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Mitsui Fudosan

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mitsui Fudosan Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain fairly 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.

Pair Trading with Gaucho Group and Mitsui Fudosan

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

The idea behind Gaucho Group Holdings and Mitsui Fudosan 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.

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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.