Correlation Between Astar and Mitsubishi Chemical

Can any of the company-specific risk be diversified away by investing in both Astar and Mitsubishi Chemical 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 Astar and Mitsubishi Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Astar and Mitsubishi Chemical Holdings, you can compare the effects of market volatilities on Astar and Mitsubishi Chemical 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 Astar with a short position of Mitsubishi Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and Mitsubishi Chemical.

Diversification Opportunities for Astar and Mitsubishi Chemical

-0.43

Correlation Coefficient

Astar  Mitsubishi Chemical

Very good diversification

The 3 months correlation between Astar and Mitsubishi is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Mitsubishi Chemical Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsubishi Chemical and Astar 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 Astar are associated (or correlated) with Mitsubishi Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsubishi Chemical has no effect on the direction of Astar i.e., Astar and Mitsubishi Chemical go up and down completely randomly.

Pair Corralation between Astar and Mitsubishi Chemical

Assuming the 90 days trading horizon Astar is expected to under-perform the Mitsubishi Chemical. In addition to that, Astar is 2.67 times more volatile than Mitsubishi Chemical Holdings. It trades about -0.15 of its total potential returns per unit of risk. Mitsubishi Chemical Holdings is currently generating about 0.0 per unit of volatility. If you would invest  520.00  in Mitsubishi Chemical Holdings on October 11, 2024 and sell it today you would lose (2.00) from holding Mitsubishi Chemical Holdings or give up 0.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Astar  vs.  Mitsubishi Chemical Holdings

Astar

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Astar are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Astar may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Mitsubishi Chemical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mitsubishi Chemical Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's technical indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Astar and Mitsubishi Chemical

The main advantage of trading using opposite Astar and Mitsubishi Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar position performs unexpectedly, Mitsubishi Chemical 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 Mitsubishi Chemical will offset losses from the drop in Mitsubishi Chemical's long position.

The idea behind Astar and Mitsubishi Chemical Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.