Correlation Between ARDAGH METAL and Mitsui Chemicals
Can any of the company-specific risk be diversified away by investing in both ARDAGH METAL 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 ARDAGH METAL and Mitsui Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARDAGH METAL PACDL 0001 and Mitsui Chemicals, you can compare the effects of market volatilities on ARDAGH METAL 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 ARDAGH METAL with a short position of Mitsui Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARDAGH METAL and Mitsui Chemicals.
Diversification Opportunities for ARDAGH METAL and Mitsui Chemicals
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ARDAGH and Mitsui is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding ARDAGH METAL PACDL 0001 and Mitsui Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsui Chemicals and ARDAGH METAL 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 ARDAGH METAL PACDL 0001 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 ARDAGH METAL i.e., ARDAGH METAL and Mitsui Chemicals go up and down completely randomly.
Pair Corralation between ARDAGH METAL and Mitsui Chemicals
Assuming the 90 days horizon ARDAGH METAL is expected to generate 1.16 times less return on investment than Mitsui Chemicals. In addition to that, ARDAGH METAL is 1.43 times more volatile than Mitsui Chemicals. It trades about 0.04 of its total potential returns per unit of risk. Mitsui Chemicals is currently generating about 0.07 per unit of volatility. If you would invest 2,100 in Mitsui Chemicals on September 1, 2024 and sell it today you would earn a total of 60.00 from holding Mitsui Chemicals or generate 2.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ARDAGH METAL PACDL 0001 vs. Mitsui Chemicals
Performance |
| Timeline |
| ARDAGH METAL PACDL |
| Mitsui Chemicals |
ARDAGH METAL and Mitsui Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARDAGH METAL and Mitsui Chemicals
The main advantage of trading using opposite ARDAGH METAL and Mitsui Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARDAGH METAL 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.| ARDAGH METAL vs. Charter Communications | ARDAGH METAL vs. Cogent Communications Holdings | ARDAGH METAL vs. Computershare Limited | ARDAGH METAL vs. Verizon Communications |
| Mitsui Chemicals vs. SIVERS SEMICONDUCTORS AB | Mitsui Chemicals vs. Darden Restaurants | Mitsui Chemicals vs. Reliance Steel Aluminum | Mitsui Chemicals vs. Q2M Managementberatung AG |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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