Correlation Between Mitsubishi Chemical and Siriuspoint

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

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

Diversification Opportunities for Mitsubishi Chemical and Siriuspoint

-0.04

Correlation Coefficient

Mitsubishi Chemical  Siriuspoint

Good diversification

The 3 months correlation between Mitsubishi and Siriuspoint is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi Chemical Holdings and Siriuspoint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siriuspoint and Mitsubishi Chemical 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 Mitsubishi Chemical Holdings are associated (or correlated) with Siriuspoint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siriuspoint has no effect on the direction of Mitsubishi Chemical i.e., Mitsubishi Chemical and Siriuspoint go up and down completely randomly.

Pair Corralation between Mitsubishi Chemical and Siriuspoint

Assuming the 90 days horizon Mitsubishi Chemical is expected to generate 1.16 times less return on investment than Siriuspoint. In addition to that, Mitsubishi Chemical is 1.2 times more volatile than Siriuspoint. It trades about 0.06 of its total potential returns per unit of risk. Siriuspoint is currently generating about 0.08 per unit of volatility. If you would invest  1,415  in Siriuspoint on December 23, 2024 and sell it today you would earn a total of  161.00  from holding Siriuspoint or generate 11.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	85.25%
Values	Daily Returns

Mitsubishi Chemical Holdings  vs.  Siriuspoint

Mitsubishi Chemical

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mitsubishi Chemical Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain technical indicators, Mitsubishi Chemical may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Siriuspoint

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Siriuspoint are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Siriuspoint unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mitsubishi Chemical and Siriuspoint

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

The idea behind Mitsubishi Chemical Holdings and Siriuspoint 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.