Correlation Between Mitsui Chemicals and ALBIS LEASING

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

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

Diversification Opportunities for Mitsui Chemicals and ALBIS LEASING

0.42

Correlation Coefficient

Mitsui Chemicals  ALBIS LEASING

Very weak diversification

The 3 months correlation between Mitsui and ALBIS is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Mitsui Chemicals and ALBIS LEASING AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALBIS LEASING AG and Mitsui Chemicals 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 Chemicals are associated (or correlated) with ALBIS LEASING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALBIS LEASING AG has no effect on the direction of Mitsui Chemicals i.e., Mitsui Chemicals and ALBIS LEASING go up and down completely randomly.

Pair Corralation between Mitsui Chemicals and ALBIS LEASING

If you would invest  2,060  in Mitsui Chemicals on December 4, 2024 and sell it today you would earn a total of  60.00  from holding Mitsui Chemicals or generate 2.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Mitsui Chemicals  vs.  ALBIS LEASING AG

Mitsui Chemicals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mitsui Chemicals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, Mitsui Chemicals is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

ALBIS LEASING AG

Risk-Adjusted Performance

Very Weak

Over the last 90 days ALBIS LEASING AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, ALBIS LEASING is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Mitsui Chemicals and ALBIS LEASING

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

The idea behind Mitsui Chemicals and ALBIS LEASING AG 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.