Correlation Between Mitsui OSK and SITC International
Can any of the company-specific risk be diversified away by investing in both Mitsui OSK and SITC International 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 OSK and SITC International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsui OSK Lines and SITC International Holdings, you can compare the effects of market volatilities on Mitsui OSK and SITC International 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 OSK with a short position of SITC International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsui OSK and SITC International.
Diversification Opportunities for Mitsui OSK and SITC International
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mitsui and SITC is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Mitsui OSK Lines and SITC International Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SITC International and Mitsui OSK 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 OSK Lines are associated (or correlated) with SITC International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SITC International has no effect on the direction of Mitsui OSK i.e., Mitsui OSK and SITC International go up and down completely randomly.
Pair Corralation between Mitsui OSK and SITC International
Assuming the 90 days horizon Mitsui OSK is expected to generate 1.55 times less return on investment than SITC International. But when comparing it to its historical volatility, Mitsui OSK Lines is 5.75 times less risky than SITC International. It trades about 0.22 of its potential returns per unit of risk. SITC International Holdings is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,659 in SITC International Holdings on August 27, 2024 and sell it today you would earn a total of 67.00 from holding SITC International Holdings or generate 2.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitsui OSK Lines vs. SITC International Holdings
Performance |
| Timeline |
| Mitsui OSK Lines |
| SITC International |
Mitsui OSK and SITC International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsui OSK and SITC International
The main advantage of trading using opposite Mitsui OSK and SITC International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsui OSK position performs unexpectedly, SITC International 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 SITC International will offset losses from the drop in SITC International's long position.| Mitsui OSK vs. SITC International Holdings | Mitsui OSK vs. Orient Overseas Limited | Mitsui OSK vs. Western Bulk Chartering | Mitsui OSK vs. Hapag Lloyd Aktiengesellschaft |
| SITC International vs. Nippon Yusen Kabushiki | SITC International vs. AP Moeller | SITC International vs. Orient Overseas Limited | SITC International vs. Western Bulk Chartering |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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