Correlation Between Itochu Corp and Mitsui
Can any of the company-specific risk be diversified away by investing in both Itochu Corp and Mitsui 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 Itochu Corp and Mitsui into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Itochu Corp ADR and Mitsui Company, you can compare the effects of market volatilities on Itochu Corp and Mitsui 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 Itochu Corp with a short position of Mitsui. Check out your portfolio center. Please also check ongoing floating volatility patterns of Itochu Corp and Mitsui.
Diversification Opportunities for Itochu Corp and Mitsui
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Itochu and Mitsui is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Itochu Corp ADR and Mitsui Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsui Company and Itochu 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 Itochu Corp ADR are associated (or correlated) with Mitsui. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsui Company has no effect on the direction of Itochu Corp i.e., Itochu Corp and Mitsui go up and down completely randomly.
Pair Corralation between Itochu Corp and Mitsui
If you would invest 9,877 in Itochu Corp ADR on August 24, 2024 and sell it today you would earn a total of 25.00 from holding Itochu Corp ADR or generate 0.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Itochu Corp ADR vs. Mitsui Company
Performance |
| Timeline |
| Itochu Corp ADR |
| Mitsui Company |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Itochu Corp and Mitsui Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Itochu Corp and Mitsui
The main advantage of trading using opposite Itochu Corp and Mitsui positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Itochu Corp position performs unexpectedly, Mitsui 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 will offset losses from the drop in Mitsui's long position.| Itochu Corp vs. Mitsubishi Corp | Itochu Corp vs. ITOCHU | Itochu Corp vs. Marubeni Corp ADR | Itochu Corp vs. Mitsui Co |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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