Correlation Between Stolt Nielsen and Mitsui OSK

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

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

Diversification Opportunities for Stolt Nielsen and Mitsui OSK

-0.36

Correlation Coefficient

Stolt Nielsen  Mitsui OSK

Very good diversification

The 3 months correlation between Stolt and Mitsui is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Stolt Nielsen Limited 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 Stolt Nielsen 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 Stolt Nielsen Limited 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 Stolt Nielsen i.e., Stolt Nielsen and Mitsui OSK go up and down completely randomly.

Pair Corralation between Stolt Nielsen and Mitsui OSK

Assuming the 90 days horizon Stolt Nielsen Limited is expected to under-perform the Mitsui OSK. In addition to that, Stolt Nielsen is 1.82 times more volatile than Mitsui OSK Lines. It trades about -0.05 of its total potential returns per unit of risk. Mitsui OSK Lines is currently generating about 0.11 per unit of volatility. If you would invest  1,667  in Mitsui OSK Lines on December 20, 2024 and sell it today you would earn a total of  168.00  from holding Mitsui OSK Lines or generate 10.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	88.14%
Values	Daily Returns

Stolt Nielsen Limited  vs.  Mitsui OSK Lines

Stolt Nielsen Limited

Risk-Adjusted Performance

Very Weak

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

Mitsui OSK Lines

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mitsui OSK Lines are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Mitsui OSK may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Stolt Nielsen and Mitsui OSK

The main advantage of trading using opposite Stolt Nielsen and Mitsui OSK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stolt Nielsen 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 Stolt Nielsen Limited 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.