Correlation Between Mitsui Chemicals and JD SPORTS
Can any of the company-specific risk be diversified away by investing in both Mitsui Chemicals and JD SPORTS 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 JD SPORTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsui Chemicals and JD SPORTS FASH, you can compare the effects of market volatilities on Mitsui Chemicals and JD SPORTS 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 JD SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsui Chemicals and JD SPORTS.
Diversification Opportunities for Mitsui Chemicals and JD SPORTS
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mitsui and 9JD is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Mitsui Chemicals and JD SPORTS FASH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD SPORTS FASH 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 JD SPORTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD SPORTS FASH has no effect on the direction of Mitsui Chemicals i.e., Mitsui Chemicals and JD SPORTS go up and down completely randomly.
Pair Corralation between Mitsui Chemicals and JD SPORTS
Assuming the 90 days trading horizon Mitsui Chemicals is expected to generate 0.56 times more return on investment than JD SPORTS. However, Mitsui Chemicals is 1.77 times less risky than JD SPORTS. It trades about 0.01 of its potential returns per unit of risk. JD SPORTS FASH is currently generating about -0.02 per unit of risk. If you would invest 2,100 in Mitsui Chemicals on October 23, 2024 and sell it today you would lose (60.00) from holding Mitsui Chemicals or give up 2.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitsui Chemicals vs. JD SPORTS FASH
Performance |
| Timeline |
| Mitsui Chemicals |
| JD SPORTS FASH |
Mitsui Chemicals and JD SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsui Chemicals and JD SPORTS
The main advantage of trading using opposite Mitsui Chemicals and JD SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsui Chemicals position performs unexpectedly, JD SPORTS 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 JD SPORTS will offset losses from the drop in JD SPORTS's long position.| Mitsui Chemicals vs. GRUPO CARSO A1 | Mitsui Chemicals vs. CARSALESCOM | Mitsui Chemicals vs. Cal Maine Foods | Mitsui Chemicals vs. CN MODERN DAIRY |
| JD SPORTS vs. FAST RETAIL ADR | JD SPORTS vs. Ross Stores | JD SPORTS vs. Designer Brands | JD SPORTS vs. Genesco |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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