Correlation Between Stellus Capital and Mitsui OSK

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

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

Diversification Opportunities for Stellus Capital and Mitsui OSK

-0.31

Correlation Coefficient

Stellus Capital  Mitsui OSK

Very good diversification

The 3 months correlation between Stellus and Mitsui is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Stellus Capital Investment and Mitsui OSK Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsui OSK Lines and Stellus Capital 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 Stellus Capital Investment are associated (or correlated) with Mitsui OSK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsui OSK Lines has no effect on the direction of Stellus Capital i.e., Stellus Capital and Mitsui OSK go up and down completely randomly.

Pair Corralation between Stellus Capital and Mitsui OSK

Considering the 90-day investment horizon Stellus Capital Investment is expected to generate 0.39 times more return on investment than Mitsui OSK. However, Stellus Capital Investment is 2.58 times less risky than Mitsui OSK. It trades about 0.08 of its potential returns per unit of risk. Mitsui OSK Lines is currently generating about 0.0 per unit of risk. If you would invest  1,331  in Stellus Capital Investment on September 4, 2024 and sell it today you would earn a total of  49.00  from holding Stellus Capital Investment or generate 3.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Stellus Capital Investment  vs.  Mitsui OSK Lines

Stellus Capital Inve

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Stellus Capital Investment are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Stellus Capital is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

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.

Pair Trading with Stellus Capital and Mitsui OSK

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

The idea behind Stellus Capital Investment and Mitsui OSK Lines 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.