Correlation Between Mitsui Chemicals and SERI INDUSTRIAL
Can any of the company-specific risk be diversified away by investing in both Mitsui Chemicals and SERI INDUSTRIAL 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 SERI INDUSTRIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsui Chemicals and SERI INDUSTRIAL EO, you can compare the effects of market volatilities on Mitsui Chemicals and SERI INDUSTRIAL 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 SERI INDUSTRIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsui Chemicals and SERI INDUSTRIAL.
Diversification Opportunities for Mitsui Chemicals and SERI INDUSTRIAL
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mitsui and SERI is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Mitsui Chemicals and SERI INDUSTRIAL EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SERI INDUSTRIAL EO 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 SERI INDUSTRIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SERI INDUSTRIAL EO has no effect on the direction of Mitsui Chemicals i.e., Mitsui Chemicals and SERI INDUSTRIAL go up and down completely randomly.
Pair Corralation between Mitsui Chemicals and SERI INDUSTRIAL
Assuming the 90 days trading horizon Mitsui Chemicals is expected to generate 0.44 times more return on investment than SERI INDUSTRIAL. However, Mitsui Chemicals is 2.28 times less risky than SERI INDUSTRIAL. It trades about -0.08 of its potential returns per unit of risk. SERI INDUSTRIAL EO is currently generating about -0.3 per unit of risk. If you would invest 2,060 in Mitsui Chemicals on October 19, 2024 and sell it today you would lose (40.00) from holding Mitsui Chemicals or give up 1.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Mitsui Chemicals vs. SERI INDUSTRIAL EO
Performance |
| Timeline |
| Mitsui Chemicals |
| SERI INDUSTRIAL EO |
Mitsui Chemicals and SERI INDUSTRIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsui Chemicals and SERI INDUSTRIAL
The main advantage of trading using opposite Mitsui Chemicals and SERI INDUSTRIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsui Chemicals position performs unexpectedly, SERI INDUSTRIAL 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 SERI INDUSTRIAL will offset losses from the drop in SERI INDUSTRIAL's long position.| Mitsui Chemicals vs. Sunny Optical Technology | Mitsui Chemicals vs. betterU Education Corp | Mitsui Chemicals vs. CAREER EDUCATION | Mitsui Chemicals vs. G8 EDUCATION |
| SERI INDUSTRIAL vs. CanSino Biologics | SERI INDUSTRIAL vs. Silicon Motion Technology | SERI INDUSTRIAL vs. China BlueChemical | SERI INDUSTRIAL vs. Mitsui Chemicals |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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