Correlation Between Mitsui and Leone Asset
Can any of the company-specific risk be diversified away by investing in both Mitsui and Leone Asset 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 Mitsui and Leone Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsui Co and Leone Asset Management, you can compare the effects of market volatilities on Mitsui and Leone Asset 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 Mitsui with a short position of Leone Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsui and Leone Asset.
Diversification Opportunities for Mitsui and Leone Asset
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mitsui and Leone is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Mitsui Co and Leone Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leone Asset Management and Mitsui 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 Mitsui Co are associated (or correlated) with Leone Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leone Asset Management has no effect on the direction of Mitsui i.e., Mitsui and Leone Asset go up and down completely randomly.
Pair Corralation between Mitsui and Leone Asset
Assuming the 90 days horizon Mitsui is expected to generate 21.32 times less return on investment than Leone Asset. But when comparing it to its historical volatility, Mitsui Co is 11.13 times less risky than Leone Asset. It trades about 0.04 of its potential returns per unit of risk. Leone Asset Management is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 6.60 in Leone Asset Management on September 14, 2024 and sell it today you would lose (2.20) from holding Leone Asset Management or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.88% |
| Values | Daily Returns |
Mitsui Co vs. Leone Asset Management
Performance |
| Timeline |
| Mitsui |
| Leone Asset Management |
Mitsui and Leone Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsui and Leone Asset
The main advantage of trading using opposite Mitsui and Leone Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsui position performs unexpectedly, Leone Asset 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 Leone Asset will offset losses from the drop in Leone Asset's long position.The idea behind Mitsui Co and Leone Asset Management 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.| Leone Asset vs. Honeywell International | Leone Asset vs. MDU Resources Group | Leone Asset vs. Compass Diversified Holdings | Leone Asset vs. Valmont Industries |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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