Correlation Between Mitsui Chemicals and G III
Can any of the company-specific risk be diversified away by investing in both Mitsui Chemicals and G III 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 G III into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsui Chemicals and G III Apparel Group, you can compare the effects of market volatilities on Mitsui Chemicals and G III 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 G III. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsui Chemicals and G III.
Diversification Opportunities for Mitsui Chemicals and G III
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mitsui and GI4 is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Mitsui Chemicals and G III Apparel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G III Apparel 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 G III. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G III Apparel has no effect on the direction of Mitsui Chemicals i.e., Mitsui Chemicals and G III go up and down completely randomly.
Pair Corralation between Mitsui Chemicals and G III
Assuming the 90 days trading horizon Mitsui Chemicals is expected to under-perform the G III. But the stock apears to be less risky and, when comparing its historical volatility, Mitsui Chemicals is 1.61 times less risky than G III. The stock trades about -0.04 of its potential returns per unit of risk. The G III Apparel Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,680 in G III Apparel Group on November 1, 2024 and sell it today you would earn a total of 420.00 from holding G III Apparel Group or generate 15.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitsui Chemicals vs. G III Apparel Group
Performance |
| Timeline |
| Mitsui Chemicals |
| G III Apparel |
Mitsui Chemicals and G III Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsui Chemicals and G III
The main advantage of trading using opposite Mitsui Chemicals and G III positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsui Chemicals position performs unexpectedly, G III 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 G III will offset losses from the drop in G III's long position.| Mitsui Chemicals vs. Comba Telecom Systems | Mitsui Chemicals vs. Iridium Communications | Mitsui Chemicals vs. China Communications Services | Mitsui Chemicals vs. CanSino Biologics |
| G III vs. United Airlines Holdings | G III vs. JD SPORTS FASH | G III vs. Singapore Airlines Limited | G III vs. Nok Airlines PCL |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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