Correlation Between Siamgas and Mitsui Chemicals
Can any of the company-specific risk be diversified away by investing in both Siamgas and Mitsui Chemicals 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 Siamgas and Mitsui Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siamgas And Petrochemicals and Mitsui Chemicals, you can compare the effects of market volatilities on Siamgas and Mitsui Chemicals 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 Siamgas with a short position of Mitsui Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siamgas and Mitsui Chemicals.
Diversification Opportunities for Siamgas and Mitsui Chemicals
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Siamgas and Mitsui is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Siamgas And Petrochemicals and Mitsui Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsui Chemicals and Siamgas 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 Siamgas And Petrochemicals are associated (or correlated) with Mitsui Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsui Chemicals has no effect on the direction of Siamgas i.e., Siamgas and Mitsui Chemicals go up and down completely randomly.
Pair Corralation between Siamgas and Mitsui Chemicals
Assuming the 90 days trading horizon Siamgas And Petrochemicals is expected to generate 2.75 times more return on investment than Mitsui Chemicals. However, Siamgas is 2.75 times more volatile than Mitsui Chemicals. It trades about 0.04 of its potential returns per unit of risk. Mitsui Chemicals is currently generating about -0.02 per unit of risk. If you would invest 17.00 in Siamgas And Petrochemicals on August 28, 2024 and sell it today you would earn a total of 1.00 from holding Siamgas And Petrochemicals or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siamgas And Petrochemicals vs. Mitsui Chemicals
Performance |
| Timeline |
| Siamgas And Petroche |
| Mitsui Chemicals |
Siamgas and Mitsui Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siamgas and Mitsui Chemicals
The main advantage of trading using opposite Siamgas and Mitsui Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siamgas position performs unexpectedly, Mitsui Chemicals 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 Chemicals will offset losses from the drop in Mitsui Chemicals' long position.The idea behind Siamgas And Petrochemicals and Mitsui Chemicals 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.| Mitsui Chemicals vs. Apple Inc | Mitsui Chemicals vs. Apple Inc | Mitsui Chemicals vs. Apple Inc | Mitsui Chemicals vs. Microsoft |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |