Correlation Between Mitsubishi Chemical and Celanese
Can any of the company-specific risk be diversified away by investing in both Mitsubishi Chemical and Celanese 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 Mitsubishi Chemical and Celanese into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsubishi Chemical Holdings and Celanese, you can compare the effects of market volatilities on Mitsubishi Chemical and Celanese 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 Mitsubishi Chemical with a short position of Celanese. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi Chemical and Celanese.
Diversification Opportunities for Mitsubishi Chemical and Celanese
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mitsubishi and Celanese is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi Chemical Holdings and Celanese in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celanese and Mitsubishi Chemical 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 Mitsubishi Chemical Holdings are associated (or correlated) with Celanese. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celanese has no effect on the direction of Mitsubishi Chemical i.e., Mitsubishi Chemical and Celanese go up and down completely randomly.
Pair Corralation between Mitsubishi Chemical and Celanese
Assuming the 90 days horizon Mitsubishi Chemical Holdings is expected to generate 0.95 times more return on investment than Celanese. However, Mitsubishi Chemical Holdings is 1.05 times less risky than Celanese. It trades about 0.01 of its potential returns per unit of risk. Celanese is currently generating about -0.03 per unit of risk. If you would invest 2,674 in Mitsubishi Chemical Holdings on August 27, 2024 and sell it today you would lose (82.00) from holding Mitsubishi Chemical Holdings or give up 3.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitsubishi Chemical Holdings vs. Celanese
Performance |
| Timeline |
| Mitsubishi Chemical |
| Celanese |
Mitsubishi Chemical and Celanese Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsubishi Chemical and Celanese
The main advantage of trading using opposite Mitsubishi Chemical and Celanese positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi Chemical position performs unexpectedly, Celanese 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 Celanese will offset losses from the drop in Celanese's long position.| Mitsubishi Chemical vs. Origin Materials | Mitsubishi Chemical vs. BASF SE NA | Mitsubishi Chemical vs. Braskem SA Class | Mitsubishi Chemical vs. Lsb Industries |
| Celanese vs. Tronox Holdings PLC | Celanese vs. Green Plains Renewable | Celanese vs. Lsb Industries | Celanese vs. Valhi Inc |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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