Correlation Between Mitsui Chemicals and Elmos Semiconductor
Can any of the company-specific risk be diversified away by investing in both Mitsui Chemicals and Elmos Semiconductor 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 Elmos Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsui Chemicals and Elmos Semiconductor SE, you can compare the effects of market volatilities on Mitsui Chemicals and Elmos Semiconductor 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 Elmos Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsui Chemicals and Elmos Semiconductor.
Diversification Opportunities for Mitsui Chemicals and Elmos Semiconductor
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mitsui and Elmos is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Mitsui Chemicals and Elmos Semiconductor SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elmos Semiconductor 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 Elmos Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elmos Semiconductor has no effect on the direction of Mitsui Chemicals i.e., Mitsui Chemicals and Elmos Semiconductor go up and down completely randomly.
Pair Corralation between Mitsui Chemicals and Elmos Semiconductor
Assuming the 90 days trading horizon Mitsui Chemicals is expected to under-perform the Elmos Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, Mitsui Chemicals is 2.02 times less risky than Elmos Semiconductor. The stock trades about -0.01 of its potential returns per unit of risk. The Elmos Semiconductor SE is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 6,190 in Elmos Semiconductor SE on October 24, 2024 and sell it today you would earn a total of 1,440 from holding Elmos Semiconductor SE or generate 23.26% 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. Elmos Semiconductor SE
Performance |
| Timeline |
| Mitsui Chemicals |
| Elmos Semiconductor |
Mitsui Chemicals and Elmos Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsui Chemicals and Elmos Semiconductor
The main advantage of trading using opposite Mitsui Chemicals and Elmos Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsui Chemicals position performs unexpectedly, Elmos Semiconductor 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 Elmos Semiconductor will offset losses from the drop in Elmos Semiconductor's long position.| Mitsui Chemicals vs. Casio Computer CoLtd | Mitsui Chemicals vs. LANDSEA GREEN MANAGEMENT | Mitsui Chemicals vs. X FAB Silicon Foundries | Mitsui Chemicals vs. Check Point Software |
| Elmos Semiconductor vs. Nippon Steel | Elmos Semiconductor vs. RELIANCE STEEL AL | Elmos Semiconductor vs. Monster Beverage Corp | Elmos Semiconductor vs. BlueScope Steel Limited |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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