Correlation Between Mitsui Chemicals and Costco Wholesale
Can any of the company-specific risk be diversified away by investing in both Mitsui Chemicals and Costco Wholesale 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 Costco Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsui Chemicals and Costco Wholesale Corp, you can compare the effects of market volatilities on Mitsui Chemicals and Costco Wholesale 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 Costco Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsui Chemicals and Costco Wholesale.
Diversification Opportunities for Mitsui Chemicals and Costco Wholesale
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mitsui and Costco is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Mitsui Chemicals and Costco Wholesale Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Costco Wholesale Corp 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 Costco Wholesale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Costco Wholesale Corp has no effect on the direction of Mitsui Chemicals i.e., Mitsui Chemicals and Costco Wholesale go up and down completely randomly.
Pair Corralation between Mitsui Chemicals and Costco Wholesale
Assuming the 90 days trading horizon Mitsui Chemicals is expected to generate 1.32 times less return on investment than Costco Wholesale. In addition to that, Mitsui Chemicals is 1.35 times more volatile than Costco Wholesale Corp. It trades about 0.18 of its total potential returns per unit of risk. Costco Wholesale Corp is currently generating about 0.32 per unit of volatility. If you would invest 82,231 in Costco Wholesale Corp on August 28, 2024 and sell it today you would earn a total of 8,669 from holding Costco Wholesale Corp or generate 10.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitsui Chemicals vs. Costco Wholesale Corp
Performance |
| Timeline |
| Mitsui Chemicals |
| Costco Wholesale Corp |
Mitsui Chemicals and Costco Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsui Chemicals and Costco Wholesale
The main advantage of trading using opposite Mitsui Chemicals and Costco Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsui Chemicals position performs unexpectedly, Costco Wholesale 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 Costco Wholesale will offset losses from the drop in Costco Wholesale's long position.| Mitsui Chemicals vs. Apple Inc | Mitsui Chemicals vs. Apple Inc | Mitsui Chemicals vs. Apple Inc | Mitsui Chemicals vs. Microsoft |
| Costco Wholesale vs. Mitsui Chemicals | Costco Wholesale vs. JJ SNACK FOODS | Costco Wholesale vs. Mitsubishi Gas Chemical | Costco Wholesale vs. United Natural Foods |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |