Correlation Between Mitsui Chemicals and CITIC
Can any of the company-specific risk be diversified away by investing in both Mitsui Chemicals and CITIC 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 CITIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsui Chemicals and CITIC LTD ADR5, you can compare the effects of market volatilities on Mitsui Chemicals and CITIC 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 CITIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsui Chemicals and CITIC.
Diversification Opportunities for Mitsui Chemicals and CITIC
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mitsui and CITIC is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Mitsui Chemicals and CITIC LTD ADR5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC LTD ADR5 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 CITIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC LTD ADR5 has no effect on the direction of Mitsui Chemicals i.e., Mitsui Chemicals and CITIC go up and down completely randomly.
Pair Corralation between Mitsui Chemicals and CITIC
Assuming the 90 days trading horizon Mitsui Chemicals is expected to under-perform the CITIC. But the stock apears to be less risky and, when comparing its historical volatility, Mitsui Chemicals is 1.27 times less risky than CITIC. The stock trades about -0.01 of its potential returns per unit of risk. The CITIC LTD ADR5 is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 457.00 in CITIC LTD ADR5 on September 19, 2024 and sell it today you would earn a total of 58.00 from holding CITIC LTD ADR5 or generate 12.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.75% |
| Values | Daily Returns |
Mitsui Chemicals vs. CITIC LTD ADR5
Performance |
| Timeline |
| Mitsui Chemicals |
| CITIC LTD ADR5 |
Mitsui Chemicals and CITIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsui Chemicals and CITIC
The main advantage of trading using opposite Mitsui Chemicals and CITIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsui Chemicals position performs unexpectedly, CITIC 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 CITIC will offset losses from the drop in CITIC's long position.| Mitsui Chemicals vs. Apple Inc | Mitsui Chemicals vs. Apple Inc | Mitsui Chemicals vs. Apple Inc | Mitsui Chemicals vs. Apple Inc |
| CITIC vs. AIR PRODCHEMICALS | CITIC vs. Daito Trust Construction | CITIC vs. Sumitomo Mitsui Construction | CITIC vs. Mitsui Chemicals |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |