Correlation Between Mitsui and Icahn Enterprises

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

By analyzing existing cross correlation between Mitsui Company and Icahn Enterprises LP, you can compare the effects of market volatilities on Mitsui and Icahn Enterprises 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 Mitsui with a short position of Icahn Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsui and Icahn Enterprises.

Diversification Opportunities for Mitsui and Icahn Enterprises

0.0

Correlation Coefficient

Mitsui  Icahn Enterprises

Pay attention - limited upside

The 3 months correlation between Mitsui and Icahn is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mitsui Company and Icahn Enterprises LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icahn Enterprises and Mitsui 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 Mitsui Company are associated (or correlated) with Icahn Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icahn Enterprises has no effect on the direction of Mitsui i.e., Mitsui and Icahn Enterprises go up and down completely randomly.

Pair Corralation between Mitsui and Icahn Enterprises

If you would invest  865.00  in Icahn Enterprises LP on December 25, 2024 and sell it today you would earn a total of  104.00  from holding Icahn Enterprises LP or generate 12.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Mitsui Company  vs.  Icahn Enterprises LP

Mitsui Company

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mitsui Company has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Mitsui is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Icahn Enterprises

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Icahn Enterprises LP are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting technical and fundamental indicators, Icahn Enterprises reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mitsui and Icahn Enterprises

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

The idea behind Mitsui Company and Icahn Enterprises LP 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.