Correlation Between Mitsui Chemicals and Haleon PLC
Can any of the company-specific risk be diversified away by investing in both Mitsui Chemicals and Haleon PLC 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 Haleon PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsui Chemicals and Haleon PLC, you can compare the effects of market volatilities on Mitsui Chemicals and Haleon PLC 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 Haleon PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsui Chemicals and Haleon PLC.
Diversification Opportunities for Mitsui Chemicals and Haleon PLC
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Mitsui and Haleon is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Mitsui Chemicals and Haleon PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haleon PLC 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 Haleon PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haleon PLC has no effect on the direction of Mitsui Chemicals i.e., Mitsui Chemicals and Haleon PLC go up and down completely randomly.
Pair Corralation between Mitsui Chemicals and Haleon PLC
Assuming the 90 days trading horizon Mitsui Chemicals is expected to under-perform the Haleon PLC. In addition to that, Mitsui Chemicals is 1.55 times more volatile than Haleon PLC. It trades about -0.12 of its total potential returns per unit of risk. Haleon PLC is currently generating about -0.05 per unit of volatility. If you would invest 895.00 in Haleon PLC on October 10, 2024 and sell it today you would lose (10.00) from holding Haleon PLC or give up 1.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitsui Chemicals vs. Haleon PLC
Performance |
| Timeline |
| Mitsui Chemicals |
| Haleon PLC |
Mitsui Chemicals and Haleon PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsui Chemicals and Haleon PLC
The main advantage of trading using opposite Mitsui Chemicals and Haleon PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsui Chemicals position performs unexpectedly, Haleon PLC 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 Haleon PLC will offset losses from the drop in Haleon PLC's long position.| Mitsui Chemicals vs. Playtech plc | Mitsui Chemicals vs. SOUTHWEST AIRLINES | Mitsui Chemicals vs. American Airlines Group | Mitsui Chemicals vs. ARISTOCRAT LEISURE |
| Haleon PLC vs. Mitsui Chemicals | Haleon PLC vs. Ultra Clean Holdings | Haleon PLC vs. CLEAN ENERGY FUELS | Haleon PLC vs. ALERION CLEANPOWER |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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