Correlation Between Mitsui Chemicals and Genco Shipping
Can any of the company-specific risk be diversified away by investing in both Mitsui Chemicals and Genco Shipping 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 Genco Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsui Chemicals and Genco Shipping Trading, you can compare the effects of market volatilities on Mitsui Chemicals and Genco Shipping 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 Genco Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsui Chemicals and Genco Shipping.
Diversification Opportunities for Mitsui Chemicals and Genco Shipping
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mitsui and Genco is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Mitsui Chemicals and Genco Shipping Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genco Shipping Trading 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 Genco Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genco Shipping Trading has no effect on the direction of Mitsui Chemicals i.e., Mitsui Chemicals and Genco Shipping go up and down completely randomly.
Pair Corralation between Mitsui Chemicals and Genco Shipping
Assuming the 90 days trading horizon Mitsui Chemicals is expected to generate 0.56 times more return on investment than Genco Shipping. However, Mitsui Chemicals is 1.79 times less risky than Genco Shipping. It trades about -0.08 of its potential returns per unit of risk. Genco Shipping Trading is currently generating about -0.11 per unit of risk. If you would invest 2,160 in Mitsui Chemicals on October 30, 2024 and sell it today you would lose (100.00) from holding Mitsui Chemicals or give up 4.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitsui Chemicals vs. Genco Shipping Trading
Performance |
| Timeline |
| Mitsui Chemicals |
| Genco Shipping Trading |
Mitsui Chemicals and Genco Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsui Chemicals and Genco Shipping
The main advantage of trading using opposite Mitsui Chemicals and Genco Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsui Chemicals position performs unexpectedly, Genco Shipping 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 Genco Shipping will offset losses from the drop in Genco Shipping's long position.| Mitsui Chemicals vs. AAC TECHNOLOGHLDGADR | Mitsui Chemicals vs. GLG LIFE TECH | Mitsui Chemicals vs. VELA TECHNOLPLC LS 0001 | Mitsui Chemicals vs. Infrastrutture Wireless Italiane |
| Genco Shipping vs. Hisense Home Appliances | Genco Shipping vs. Alaska Air Group | Genco Shipping vs. Delta Air Lines | Genco Shipping vs. Ryanair Holdings plc |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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