Correlation Between ABERFORTH SMCOS and Mitsui OSK
Can any of the company-specific risk be diversified away by investing in both ABERFORTH SMCOS and Mitsui OSK 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 ABERFORTH SMCOS and Mitsui OSK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABERFORTH SMCOS TRLS 01 and Mitsui OSK Lines, you can compare the effects of market volatilities on ABERFORTH SMCOS and Mitsui OSK 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 ABERFORTH SMCOS with a short position of Mitsui OSK. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABERFORTH SMCOS and Mitsui OSK.
Diversification Opportunities for ABERFORTH SMCOS and Mitsui OSK
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ABERFORTH and Mitsui is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding ABERFORTH SMCOS TRLS 01 and Mitsui OSK Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsui OSK Lines and ABERFORTH SMCOS 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 ABERFORTH SMCOS TRLS 01 are associated (or correlated) with Mitsui OSK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsui OSK Lines has no effect on the direction of ABERFORTH SMCOS i.e., ABERFORTH SMCOS and Mitsui OSK go up and down completely randomly.
Pair Corralation between ABERFORTH SMCOS and Mitsui OSK
Assuming the 90 days horizon ABERFORTH SMCOS TRLS 01 is expected to generate 0.47 times more return on investment than Mitsui OSK. However, ABERFORTH SMCOS TRLS 01 is 2.12 times less risky than Mitsui OSK. It trades about 0.06 of its potential returns per unit of risk. Mitsui OSK Lines is currently generating about 0.02 per unit of risk. If you would invest 1,493 in ABERFORTH SMCOS TRLS 01 on September 3, 2024 and sell it today you would earn a total of 227.00 from holding ABERFORTH SMCOS TRLS 01 or generate 15.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ABERFORTH SMCOS TRLS 01 vs. Mitsui OSK Lines
Performance |
| Timeline |
| ABERFORTH SMCOS TRLS |
| Mitsui OSK Lines |
ABERFORTH SMCOS and Mitsui OSK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABERFORTH SMCOS and Mitsui OSK
The main advantage of trading using opposite ABERFORTH SMCOS and Mitsui OSK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABERFORTH SMCOS position performs unexpectedly, Mitsui OSK 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 OSK will offset losses from the drop in Mitsui OSK's long position.| ABERFORTH SMCOS vs. VITEC SOFTWARE GROUP | ABERFORTH SMCOS vs. Check Point Software | ABERFORTH SMCOS vs. Axway Software SA | ABERFORTH SMCOS vs. Sqs Software Quality |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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