Correlation Between Mitsui Chemicals and Lendlease
Can any of the company-specific risk be diversified away by investing in both Mitsui Chemicals and Lendlease 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 Lendlease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsui Chemicals and Lendlease Group, you can compare the effects of market volatilities on Mitsui Chemicals and Lendlease 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 Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsui Chemicals and Lendlease.
Diversification Opportunities for Mitsui Chemicals and Lendlease
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mitsui and Lendlease is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Mitsui Chemicals and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group 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 Lendlease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendlease Group has no effect on the direction of Mitsui Chemicals i.e., Mitsui Chemicals and Lendlease go up and down completely randomly.
Pair Corralation between Mitsui Chemicals and Lendlease
Assuming the 90 days trading horizon Mitsui Chemicals is expected to generate 1.98 times less return on investment than Lendlease. In addition to that, Mitsui Chemicals is 1.57 times more volatile than Lendlease Group. It trades about 0.07 of its total potential returns per unit of risk. Lendlease Group is currently generating about 0.21 per unit of volatility. If you would invest 405.00 in Lendlease Group on September 1, 2024 and sell it today you would earn a total of 27.00 from holding Lendlease Group or generate 6.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitsui Chemicals vs. Lendlease Group
Performance |
| Timeline |
| Mitsui Chemicals |
| Lendlease Group |
Mitsui Chemicals and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsui Chemicals and Lendlease
The main advantage of trading using opposite Mitsui Chemicals and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsui Chemicals position performs unexpectedly, Lendlease 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 Lendlease will offset losses from the drop in Lendlease's long position.| Mitsui Chemicals vs. SIVERS SEMICONDUCTORS AB | Mitsui Chemicals vs. Darden Restaurants | Mitsui Chemicals vs. Reliance Steel Aluminum | Mitsui Chemicals vs. Q2M Managementberatung 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |