Correlation Between Mitsui Chemicals and PENN NATL
Can any of the company-specific risk be diversified away by investing in both Mitsui Chemicals and PENN NATL 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 PENN NATL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsui Chemicals and PENN NATL GAMING, you can compare the effects of market volatilities on Mitsui Chemicals and PENN NATL 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 PENN NATL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsui Chemicals and PENN NATL.
Diversification Opportunities for Mitsui Chemicals and PENN NATL
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mitsui and PENN is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Mitsui Chemicals and PENN NATL GAMING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENN NATL GAMING 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 PENN NATL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PENN NATL GAMING has no effect on the direction of Mitsui Chemicals i.e., Mitsui Chemicals and PENN NATL go up and down completely randomly.
Pair Corralation between Mitsui Chemicals and PENN NATL
Assuming the 90 days trading horizon Mitsui Chemicals is expected to under-perform the PENN NATL. But the stock apears to be less risky and, when comparing its historical volatility, Mitsui Chemicals is 1.44 times less risky than PENN NATL. The stock trades about -0.08 of its potential returns per unit of risk. The PENN NATL GAMING is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,496 in PENN NATL GAMING on September 3, 2024 and sell it today you would earn a total of 487.00 from holding PENN NATL GAMING or generate 32.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitsui Chemicals vs. PENN NATL GAMING
Performance |
| Timeline |
| Mitsui Chemicals |
| PENN NATL GAMING |
Mitsui Chemicals and PENN NATL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsui Chemicals and PENN NATL
The main advantage of trading using opposite Mitsui Chemicals and PENN NATL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsui Chemicals position performs unexpectedly, PENN NATL 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 PENN NATL will offset losses from the drop in PENN NATL's long position.| Mitsui Chemicals vs. DXC Technology Co | Mitsui Chemicals vs. Computer And Technologies | Mitsui Chemicals vs. SCOTT TECHNOLOGY | Mitsui Chemicals vs. Casio Computer CoLtd |
| PENN NATL vs. NTG Nordic Transport | PENN NATL vs. ARISTOCRAT LEISURE | PENN NATL vs. PARKEN Sport Entertainment | PENN NATL vs. USWE SPORTS AB |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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