Correlation Between Mitsui Chemicals and New York
Can any of the company-specific risk be diversified away by investing in both Mitsui Chemicals and New York 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 New York into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsui Chemicals and New York Community, you can compare the effects of market volatilities on Mitsui Chemicals and New York 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 New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsui Chemicals and New York.
Diversification Opportunities for Mitsui Chemicals and New York
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mitsui and New is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Mitsui Chemicals and New York Community in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New York Community 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 New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New York Community has no effect on the direction of Mitsui Chemicals i.e., Mitsui Chemicals and New York go up and down completely randomly.
Pair Corralation between Mitsui Chemicals and New York
Assuming the 90 days trading horizon Mitsui Chemicals is expected to generate 17.29 times less return on investment than New York. But when comparing it to its historical volatility, Mitsui Chemicals is 1.8 times less risky than New York. It trades about 0.01 of its potential returns per unit of risk. New York Community is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 860.00 in New York Community on October 24, 2024 and sell it today you would earn a total of 20.00 from holding New York Community or generate 2.33% 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. New York Community
Performance |
| Timeline |
| Mitsui Chemicals |
| New York Community |
Mitsui Chemicals and New York Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsui Chemicals and New York
The main advantage of trading using opposite Mitsui Chemicals and New York positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsui Chemicals position performs unexpectedly, New York 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 New York will offset losses from the drop in New York's long position.| Mitsui Chemicals vs. Compagnie Plastic Omnium | Mitsui Chemicals vs. NEWELL RUBBERMAID | Mitsui Chemicals vs. IDP EDUCATION LTD | Mitsui Chemicals vs. DeVry Education Group |
| New York vs. Mitsui Chemicals | New York vs. BII Railway Transportation | New York vs. MTY Food Group | New York vs. GOLD ROAD RES |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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