Correlation Between Mitsui Chemicals and TIMES CHINA
Can any of the company-specific risk be diversified away by investing in both Mitsui Chemicals and TIMES CHINA 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 TIMES CHINA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsui Chemicals and TIMES CHINA HLDGS, you can compare the effects of market volatilities on Mitsui Chemicals and TIMES CHINA 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 TIMES CHINA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsui Chemicals and TIMES CHINA.
Diversification Opportunities for Mitsui Chemicals and TIMES CHINA
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mitsui and TIMES is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Mitsui Chemicals and TIMES CHINA HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TIMES CHINA HLDGS 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 TIMES CHINA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TIMES CHINA HLDGS has no effect on the direction of Mitsui Chemicals i.e., Mitsui Chemicals and TIMES CHINA go up and down completely randomly.
Pair Corralation between Mitsui Chemicals and TIMES CHINA
Assuming the 90 days trading horizon Mitsui Chemicals is expected to generate 0.2 times more return on investment than TIMES CHINA. However, Mitsui Chemicals is 5.1 times less risky than TIMES CHINA. It trades about 0.01 of its potential returns per unit of risk. TIMES CHINA HLDGS is currently generating about -0.03 per unit of risk. If you would invest 2,100 in Mitsui Chemicals on November 4, 2024 and sell it today you would earn a total of 0.00 from holding Mitsui Chemicals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitsui Chemicals vs. TIMES CHINA HLDGS
Performance |
| Timeline |
| Mitsui Chemicals |
| TIMES CHINA HLDGS |
Mitsui Chemicals and TIMES CHINA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsui Chemicals and TIMES CHINA
The main advantage of trading using opposite Mitsui Chemicals and TIMES CHINA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsui Chemicals position performs unexpectedly, TIMES CHINA 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 TIMES CHINA will offset losses from the drop in TIMES CHINA's long position.| Mitsui Chemicals vs. Apple Inc | Mitsui Chemicals vs. Apple Inc | Mitsui Chemicals vs. Apple Inc | Mitsui Chemicals vs. Apple Inc |
| TIMES CHINA vs. HOCHSCHILD MINING | TIMES CHINA vs. DETALION GAMES SA | TIMES CHINA vs. DXC Technology Co | TIMES CHINA vs. OURGAME INTHOLDL 00005 |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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