Correlation Between Nippon Yusen and Mitsui OSK
Can any of the company-specific risk be diversified away by investing in both Nippon Yusen and Mitsui OSK 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 Nippon Yusen and Mitsui OSK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nippon Yusen Kabushiki and Mitsui OSK Lines, you can compare the effects of market volatilities on Nippon Yusen and Mitsui OSK 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 Nippon Yusen with a short position of Mitsui OSK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nippon Yusen and Mitsui OSK.
Diversification Opportunities for Nippon Yusen and Mitsui OSK
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nippon and Mitsui is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Nippon Yusen Kabushiki and Mitsui OSK Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsui OSK Lines and Nippon Yusen 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 Nippon Yusen Kabushiki are associated (or correlated) with Mitsui OSK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsui OSK Lines has no effect on the direction of Nippon Yusen i.e., Nippon Yusen and Mitsui OSK go up and down completely randomly.
Pair Corralation between Nippon Yusen and Mitsui OSK
Assuming the 90 days trading horizon Nippon Yusen Kabushiki is expected to under-perform the Mitsui OSK. But the stock apears to be less risky and, when comparing its historical volatility, Nippon Yusen Kabushiki is 1.04 times less risky than Mitsui OSK. The stock trades about -0.12 of its potential returns per unit of risk. The Mitsui OSK Lines is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 3,193 in Mitsui OSK Lines on October 20, 2024 and sell it today you would lose (99.00) from holding Mitsui OSK Lines or give up 3.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nippon Yusen Kabushiki vs. Mitsui OSK Lines
Performance |
| Timeline |
| Nippon Yusen Kabushiki |
| Mitsui OSK Lines |
Nippon Yusen and Mitsui OSK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nippon Yusen and Mitsui OSK
The main advantage of trading using opposite Nippon Yusen and Mitsui OSK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nippon Yusen position performs unexpectedly, Mitsui OSK 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 Mitsui OSK will offset losses from the drop in Mitsui OSK's long position.| Nippon Yusen vs. Hapag Lloyd AG | Nippon Yusen vs. Orient Overseas Limited | Nippon Yusen vs. Mitsui OSK Lines | Nippon Yusen vs. Kawasaki Kisen Kaisha |
| Mitsui OSK vs. Nippon Yusen Kabushiki | Mitsui OSK vs. Hapag Lloyd AG | Mitsui OSK vs. Orient Overseas Limited | Mitsui OSK vs. Kawasaki Kisen Kaisha |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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