Correlation Between Kawasaki Kisen and Mitsubishi Gas

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Can any of the company-specific risk be diversified away by investing in both Kawasaki Kisen and Mitsubishi Gas 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 Kawasaki Kisen and Mitsubishi Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kawasaki Kisen Kaisha and Mitsubishi Gas Chemical, you can compare the effects of market volatilities on Kawasaki Kisen and Mitsubishi Gas 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 Kawasaki Kisen with a short position of Mitsubishi Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kawasaki Kisen and Mitsubishi Gas.

Diversification Opportunities for Kawasaki Kisen and Mitsubishi Gas

KawasakiMitsubishiDiversified AwayKawasakiMitsubishiDiversified Away100%
0.14
  Correlation Coefficient

Average diversification

The 3 months correlation between Kawasaki and Mitsubishi is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Kawasaki Kisen Kaisha and Mitsubishi Gas Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsubishi Gas Chemical and Kawasaki Kisen 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 Kawasaki Kisen Kaisha are associated (or correlated) with Mitsubishi Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsubishi Gas Chemical has no effect on the direction of Kawasaki Kisen i.e., Kawasaki Kisen and Mitsubishi Gas go up and down completely randomly.

Pair Corralation between Kawasaki Kisen and Mitsubishi Gas

Assuming the 90 days trading horizon Kawasaki Kisen Kaisha is expected to under-perform the Mitsubishi Gas. In addition to that, Kawasaki Kisen is 1.58 times more volatile than Mitsubishi Gas Chemical. It trades about -0.03 of its total potential returns per unit of risk. Mitsubishi Gas Chemical is currently generating about 0.06 per unit of volatility. If you would invest  1,630  in Mitsubishi Gas Chemical on October 20, 2024 and sell it today you would earn a total of  70.00  from holding Mitsubishi Gas Chemical or generate 4.29% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Kawasaki Kisen Kaisha  vs.  Mitsubishi Gas Chemical

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -50510
JavaScript chart by amCharts 3.21.15KLI1 MUG
       Timeline  
Kawasaki Kisen Kaisha 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Kawasaki Kisen Kaisha has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, Kawasaki Kisen is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan12.412.612.81313.213.413.613.8
Mitsubishi Gas Chemical 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Mitsubishi Gas Chemical are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Mitsubishi Gas is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan1616.51717.518

Kawasaki Kisen and Mitsubishi Gas Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.65-4.98-3.31-1.640.01.633.325.026.718.4 0.050.100.150.20
JavaScript chart by amCharts 3.21.15KLI1 MUG
       Returns  

Pair Trading with Kawasaki Kisen and Mitsubishi Gas

The main advantage of trading using opposite Kawasaki Kisen and Mitsubishi Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kawasaki Kisen position performs unexpectedly, Mitsubishi Gas 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 Gas will offset losses from the drop in Mitsubishi Gas' long position.
The idea behind Kawasaki Kisen Kaisha and Mitsubishi Gas Chemical 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

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