Correlation Between Panasonic Corp and Metallurgical

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

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

Diversification Opportunities for Panasonic Corp and Metallurgical

-0.41

Correlation Coefficient

Panasonic Corp  Metallurgical

Very good diversification

The 3 months correlation between Panasonic and Metallurgical is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Panasonic Corp and Metallurgical of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metallurgical and Panasonic Corp 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 Panasonic Corp are associated (or correlated) with Metallurgical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metallurgical has no effect on the direction of Panasonic Corp i.e., Panasonic Corp and Metallurgical go up and down completely randomly.

Pair Corralation between Panasonic Corp and Metallurgical

Assuming the 90 days trading horizon Panasonic Corp is expected to under-perform the Metallurgical. But the stock apears to be less risky and, when comparing its historical volatility, Panasonic Corp is 1.96 times less risky than Metallurgical. The stock trades about -0.09 of its potential returns per unit of risk. The Metallurgical of is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  16.00  in Metallurgical of on April 24, 2025 and sell it today you would earn a total of  3.00  from holding Metallurgical of or generate 18.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Panasonic Corp  vs.  Metallurgical of

Panasonic Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Panasonic Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Metallurgical

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Metallurgical of are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Metallurgical reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Panasonic Corp and Metallurgical

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

The idea behind Panasonic Corp and Metallurgical of 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.