Correlation Between Mitsui Chemicals and Powercell Sweden
Can any of the company-specific risk be diversified away by investing in both Mitsui Chemicals and Powercell Sweden 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 Chemicals and Powercell Sweden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsui Chemicals and Powercell Sweden, you can compare the effects of market volatilities on Mitsui Chemicals and Powercell Sweden 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 Chemicals with a short position of Powercell Sweden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsui Chemicals and Powercell Sweden.
Diversification Opportunities for Mitsui Chemicals and Powercell Sweden
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mitsui and Powercell is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Mitsui Chemicals and Powercell Sweden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powercell Sweden and Mitsui Chemicals 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 Chemicals are associated (or correlated) with Powercell Sweden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powercell Sweden has no effect on the direction of Mitsui Chemicals i.e., Mitsui Chemicals and Powercell Sweden go up and down completely randomly.
Pair Corralation between Mitsui Chemicals and Powercell Sweden
Assuming the 90 days trading horizon Mitsui Chemicals is expected to generate 0.34 times more return on investment than Powercell Sweden. However, Mitsui Chemicals is 2.93 times less risky than Powercell Sweden. It trades about 0.07 of its potential returns per unit of risk. Powercell Sweden is currently generating about -0.13 per unit of risk. If you would invest 2,100 in Mitsui Chemicals on December 25, 2024 and sell it today you would earn a total of 100.00 from holding Mitsui Chemicals or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitsui Chemicals vs. Powercell Sweden
Performance |
| Timeline |
| Mitsui Chemicals |
| Powercell Sweden |
Mitsui Chemicals and Powercell Sweden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsui Chemicals and Powercell Sweden
The main advantage of trading using opposite Mitsui Chemicals and Powercell Sweden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsui Chemicals position performs unexpectedly, Powercell Sweden 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 Powercell Sweden will offset losses from the drop in Powercell Sweden's long position.| Mitsui Chemicals vs. NORTHEAST UTILITIES | Mitsui Chemicals vs. MAG SILVER | Mitsui Chemicals vs. Canadian Utilities Limited | Mitsui Chemicals vs. RESMINING UNSPADR10 |
| Powercell Sweden vs. MAANSHAN IRON H | Powercell Sweden vs. Khiron Life Sciences | Powercell Sweden vs. PennyMac Mortgage Investment | Powercell Sweden vs. New Residential Investment |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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