Correlation Between Mitsui Chemicals and Hawesko Holding
Can any of the company-specific risk be diversified away by investing in both Mitsui Chemicals and Hawesko Holding 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 Hawesko Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsui Chemicals and Hawesko Holding AG, you can compare the effects of market volatilities on Mitsui Chemicals and Hawesko Holding 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 Hawesko Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsui Chemicals and Hawesko Holding.
Diversification Opportunities for Mitsui Chemicals and Hawesko Holding
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mitsui and Hawesko is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Mitsui Chemicals and Hawesko Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawesko Holding AG 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 Hawesko Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawesko Holding AG has no effect on the direction of Mitsui Chemicals i.e., Mitsui Chemicals and Hawesko Holding go up and down completely randomly.
Pair Corralation between Mitsui Chemicals and Hawesko Holding
Assuming the 90 days trading horizon Mitsui Chemicals is expected to generate 0.78 times more return on investment than Hawesko Holding. However, Mitsui Chemicals is 1.29 times less risky than Hawesko Holding. It trades about 0.01 of its potential returns per unit of risk. Hawesko Holding AG is currently generating about -0.02 per unit of risk. If you would invest 2,160 in Mitsui Chemicals on September 4, 2024 and sell it today you would earn a total of 0.00 from holding Mitsui Chemicals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Mitsui Chemicals vs. Hawesko Holding AG
Performance |
| Timeline |
| Mitsui Chemicals |
| Hawesko Holding AG |
Mitsui Chemicals and Hawesko Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsui Chemicals and Hawesko Holding
The main advantage of trading using opposite Mitsui Chemicals and Hawesko Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsui Chemicals position performs unexpectedly, Hawesko Holding 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 Hawesko Holding will offset losses from the drop in Hawesko Holding's long position.| Mitsui Chemicals vs. TOTAL GABON | Mitsui Chemicals vs. Walgreens Boots Alliance | Mitsui Chemicals vs. Peak Resources Limited |
| Hawesko Holding vs. Siamgas And Petrochemicals | Hawesko Holding vs. Apollo Medical Holdings | Hawesko Holding vs. MEDICAL FACILITIES NEW | Hawesko Holding vs. SBM OFFSHORE |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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