Correlation Between Mitsui Chemicals and PNC Financial
Can any of the company-specific risk be diversified away by investing in both Mitsui Chemicals and PNC Financial 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 PNC Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsui Chemicals and PNC Financial Services, you can compare the effects of market volatilities on Mitsui Chemicals and PNC Financial 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 PNC Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsui Chemicals and PNC Financial.
Diversification Opportunities for Mitsui Chemicals and PNC Financial
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mitsui and PNC is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Mitsui Chemicals and PNC Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PNC Financial Services 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 PNC Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PNC Financial Services has no effect on the direction of Mitsui Chemicals i.e., Mitsui Chemicals and PNC Financial go up and down completely randomly.
Pair Corralation between Mitsui Chemicals and PNC Financial
Assuming the 90 days trading horizon Mitsui Chemicals is expected to generate 1.63 times more return on investment than PNC Financial. However, Mitsui Chemicals is 1.63 times more volatile than PNC Financial Services. It trades about -0.03 of its potential returns per unit of risk. PNC Financial Services is currently generating about -0.08 per unit of risk. If you would invest 2,080 in Mitsui Chemicals on October 17, 2024 and sell it today you would lose (60.00) from holding Mitsui Chemicals or give up 2.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitsui Chemicals vs. PNC Financial Services
Performance |
| Timeline |
| Mitsui Chemicals |
| PNC Financial Services |
Mitsui Chemicals and PNC Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsui Chemicals and PNC Financial
The main advantage of trading using opposite Mitsui Chemicals and PNC Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsui Chemicals position performs unexpectedly, PNC Financial 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 PNC Financial will offset losses from the drop in PNC Financial's long position.| Mitsui Chemicals vs. MCEWEN MINING INC | Mitsui Chemicals vs. MAGNUM MINING EXP | Mitsui Chemicals vs. Perseus Mining Limited | Mitsui Chemicals vs. GRENKELEASING Dusseldorf |
| PNC Financial vs. SILICON LABORATOR | PNC Financial vs. Hua Hong Semiconductor | PNC Financial vs. Mitsui Chemicals | PNC Financial vs. PTT Global Chemical |
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 Stocks Directory module to find actively traded stocks across global markets.
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