Correlation Between Mitsui and Swire Pacific
Can any of the company-specific risk be diversified away by investing in both Mitsui and Swire Pacific 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 Swire Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsui Company and Swire Pacific, you can compare the effects of market volatilities on Mitsui and Swire Pacific 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 Swire Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsui and Swire Pacific.
Diversification Opportunities for Mitsui and Swire Pacific
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mitsui and Swire is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Mitsui Company and Swire Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swire Pacific 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 Company are associated (or correlated) with Swire Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swire Pacific has no effect on the direction of Mitsui i.e., Mitsui and Swire Pacific go up and down completely randomly.
Pair Corralation between Mitsui and Swire Pacific
If you would invest 566.00 in Swire Pacific on August 27, 2024 and sell it today you would earn a total of 254.00 from holding Swire Pacific or generate 44.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.27% |
| Values | Daily Returns |
Mitsui Company vs. Swire Pacific
Performance |
| Timeline |
| Mitsui Company |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Swire Pacific |
Mitsui and Swire Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsui and Swire Pacific
The main advantage of trading using opposite Mitsui and Swire Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsui position performs unexpectedly, Swire Pacific 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 Swire Pacific will offset losses from the drop in Swire Pacific's long position.The idea behind Mitsui Company and Swire Pacific 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.| Swire Pacific vs. CK Hutchison Holdings | Swire Pacific vs. Marubeni | Swire Pacific vs. Sumitomo Corp ADR | Swire Pacific vs. Marubeni Corp ADR |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |