Correlation Between Western Bulk and Mitsui OSK
Can any of the company-specific risk be diversified away by investing in both Western Bulk 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 Western Bulk and Mitsui OSK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Bulk Chartering and Mitsui OSK Lines, you can compare the effects of market volatilities on Western Bulk 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 Western Bulk with a short position of Mitsui OSK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Bulk and Mitsui OSK.
Diversification Opportunities for Western Bulk and Mitsui OSK
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Mitsui is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Western Bulk Chartering 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 Western Bulk 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 Western Bulk Chartering 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 Western Bulk i.e., Western Bulk and Mitsui OSK go up and down completely randomly.
Pair Corralation between Western Bulk and Mitsui OSK
Assuming the 90 days horizon Western Bulk Chartering is expected to under-perform the Mitsui OSK. In addition to that, Western Bulk is 3.59 times more volatile than Mitsui OSK Lines. It trades about -0.26 of its total potential returns per unit of risk. Mitsui OSK Lines is currently generating about 0.22 per unit of volatility. If you would invest 1,628 in Mitsui OSK Lines on August 28, 2024 and sell it today you would earn a total of 138.00 from holding Mitsui OSK Lines or generate 8.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Bulk Chartering vs. Mitsui OSK Lines
Performance |
| Timeline |
| Western Bulk Chartering |
| Mitsui OSK Lines |
Western Bulk and Mitsui OSK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Bulk and Mitsui OSK
The main advantage of trading using opposite Western Bulk and Mitsui OSK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Bulk 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.| Western Bulk vs. AP Mller | Western Bulk vs. COSCO SHIPPING Holdings | Western Bulk vs. Orient Overseas Limited |
| 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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