Correlation Between Mitsui OSK and MPC Container

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

By analyzing existing cross correlation between Mitsui OSK Lines and MPC Container Ships, you can compare the effects of market volatilities on Mitsui OSK and MPC Container 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 OSK with a short position of MPC Container. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsui OSK and MPC Container.

Diversification Opportunities for Mitsui OSK and MPC Container

0.05

Correlation Coefficient

Mitsui OSK  MPC Container

Significant diversification

The 3 months correlation between Mitsui and MPC is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Mitsui OSK Lines and MPC Container Ships in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MPC Container Ships and Mitsui OSK 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 OSK Lines are associated (or correlated) with MPC Container. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MPC Container Ships has no effect on the direction of Mitsui OSK i.e., Mitsui OSK and MPC Container go up and down completely randomly.

Pair Corralation between Mitsui OSK and MPC Container

Assuming the 90 days horizon Mitsui OSK Lines is expected to generate 0.58 times more return on investment than MPC Container. However, Mitsui OSK Lines is 1.73 times less risky than MPC Container. It trades about -0.21 of its potential returns per unit of risk. MPC Container Ships is currently generating about -0.25 per unit of risk. If you would invest  1,762  in Mitsui OSK Lines on September 24, 2024 and sell it today you would lose (95.00) from holding Mitsui OSK Lines or give up 5.39% of portfolio value over 90 days.

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

Mitsui OSK Lines  vs.  MPC Container Ships

Mitsui OSK Lines

Risk-Adjusted Performance

0 of 100

Very Weak

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

MPC Container Ships

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MPC Container Ships has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Mitsui OSK and MPC Container

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

The idea behind Mitsui OSK Lines and MPC Container Ships 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.