Correlation Between Mitsui Chemicals and ANGANG STEEL
Can any of the company-specific risk be diversified away by investing in both Mitsui Chemicals and ANGANG STEEL 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 ANGANG STEEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsui Chemicals and ANGANG STEEL H , you can compare the effects of market volatilities on Mitsui Chemicals and ANGANG STEEL 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 ANGANG STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsui Chemicals and ANGANG STEEL.
Diversification Opportunities for Mitsui Chemicals and ANGANG STEEL
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Mitsui and ANGANG is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Mitsui Chemicals and ANGANG STEEL H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANGANG STEEL H 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 ANGANG STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANGANG STEEL H has no effect on the direction of Mitsui Chemicals i.e., Mitsui Chemicals and ANGANG STEEL go up and down completely randomly.
Pair Corralation between Mitsui Chemicals and ANGANG STEEL
Assuming the 90 days trading horizon Mitsui Chemicals is expected to generate 0.47 times more return on investment than ANGANG STEEL. However, Mitsui Chemicals is 2.15 times less risky than ANGANG STEEL. It trades about 0.0 of its potential returns per unit of risk. ANGANG STEEL H is currently generating about -0.01 per unit of risk. If you would invest 2,220 in Mitsui Chemicals on November 9, 2024 and sell it today you would lose (160.00) from holding Mitsui Chemicals or give up 7.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitsui Chemicals vs. ANGANG STEEL H
Performance |
| Timeline |
| Mitsui Chemicals |
| ANGANG STEEL H |
Mitsui Chemicals and ANGANG STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsui Chemicals and ANGANG STEEL
The main advantage of trading using opposite Mitsui Chemicals and ANGANG STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsui Chemicals position performs unexpectedly, ANGANG STEEL 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 ANGANG STEEL will offset losses from the drop in ANGANG STEEL's long position.| Mitsui Chemicals vs. ALTAIR RES INC | Mitsui Chemicals vs. CAREER EDUCATION | Mitsui Chemicals vs. Alaska Air Group | Mitsui Chemicals vs. NORWEGIAN AIR SHUT |
| ANGANG STEEL vs. TRAVEL LEISURE DL 01 | ANGANG STEEL vs. Playtech plc | ANGANG STEEL vs. Gaming and Leisure | ANGANG STEEL vs. PSI Software AG |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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