Correlation Between Mitsui Chemicals and Arkema SA
Can any of the company-specific risk be diversified away by investing in both Mitsui Chemicals and Arkema SA 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 Arkema SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsui Chemicals ADR and Arkema SA ADR, you can compare the effects of market volatilities on Mitsui Chemicals and Arkema SA 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 Arkema SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsui Chemicals and Arkema SA.
Diversification Opportunities for Mitsui Chemicals and Arkema SA
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mitsui and Arkema is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Mitsui Chemicals ADR and Arkema SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arkema SA ADR 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 ADR are associated (or correlated) with Arkema SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arkema SA ADR has no effect on the direction of Mitsui Chemicals i.e., Mitsui Chemicals and Arkema SA go up and down completely randomly.
Pair Corralation between Mitsui Chemicals and Arkema SA
Assuming the 90 days horizon Mitsui Chemicals ADR is expected to generate 0.49 times more return on investment than Arkema SA. However, Mitsui Chemicals ADR is 2.04 times less risky than Arkema SA. It trades about -0.16 of its potential returns per unit of risk. Arkema SA ADR is currently generating about -0.09 per unit of risk. If you would invest 1,255 in Mitsui Chemicals ADR on September 3, 2025 and sell it today you would lose (115.00) from holding Mitsui Chemicals ADR or give up 9.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Mitsui Chemicals ADR vs. Arkema SA ADR
Performance |
| Timeline |
| Mitsui Chemicals ADR |
| Arkema SA ADR |
Mitsui Chemicals and Arkema SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsui Chemicals and Arkema SA
The main advantage of trading using opposite Mitsui Chemicals and Arkema SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsui Chemicals position performs unexpectedly, Arkema SA 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 Arkema SA will offset losses from the drop in Arkema SA's long position.| Mitsui Chemicals vs. Sherwin Williams Co | Mitsui Chemicals vs. Air Liquide SA | Mitsui Chemicals vs. LAir Liquide SA | Mitsui Chemicals vs. Ecolab Inc |
| Arkema SA vs. Compagnie Plastic Omnium | Arkema SA vs. Iron Road Limited | Arkema SA vs. JB Hunt Transport | Arkema SA vs. Broadstone Net Lease |
Check out your portfolio center.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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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