Correlation Between SITC International and Mitsui OSK
Can any of the company-specific risk be diversified away by investing in both SITC International 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 SITC International and Mitsui OSK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SITC International Holdings and Mitsui OSK Lines, you can compare the effects of market volatilities on SITC International 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 SITC International with a short position of Mitsui OSK. Check out your portfolio center. Please also check ongoing floating volatility patterns of SITC International and Mitsui OSK.
Diversification Opportunities for SITC International and Mitsui OSK
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SITC and Mitsui is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding SITC International Holdings 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 SITC International 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 SITC International Holdings 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 SITC International i.e., SITC International and Mitsui OSK go up and down completely randomly.
Pair Corralation between SITC International and Mitsui OSK
Assuming the 90 days horizon SITC International Holdings is expected to generate 5.75 times more return on investment than Mitsui OSK. However, SITC International is 5.75 times more volatile than Mitsui OSK Lines. It trades about 0.06 of its potential returns per unit of risk. Mitsui OSK Lines is currently generating about 0.22 per unit of risk. 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 |
SITC International Holdings vs. Mitsui OSK Lines
Performance |
| Timeline |
| SITC International |
| Mitsui OSK Lines |
SITC International and Mitsui OSK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SITC International and Mitsui OSK
The main advantage of trading using opposite SITC International and Mitsui OSK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SITC International 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.| SITC International vs. Nippon Yusen Kabushiki | SITC International vs. AP Moeller | SITC International vs. Orient Overseas Limited | SITC International vs. Western Bulk Chartering |
| Mitsui OSK vs. SITC International Holdings | Mitsui OSK vs. Orient Overseas Limited | Mitsui OSK vs. Western Bulk Chartering | Mitsui OSK vs. Hapag Lloyd Aktiengesellschaft |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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