Correlation Between Mitsui Chemicals and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Mitsui Chemicals and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Mitsui Chemicals and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsui Chemicals and Dow Jones.
Diversification Opportunities for Mitsui Chemicals and Dow Jones
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mitsui and Dow is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Mitsui Chemicals ADR and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Mitsui Chemicals i.e., Mitsui Chemicals and Dow Jones go up and down completely randomly.
Pair Corralation between Mitsui Chemicals and Dow Jones
Assuming the 90 days horizon Mitsui Chemicals ADR is expected to generate 1.36 times more return on investment than Dow Jones. However, Mitsui Chemicals is 1.36 times more volatile than Dow Jones Industrial. It trades about 0.17 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.1 per unit of risk. If you would invest 1,128 in Mitsui Chemicals ADR on July 20, 2025 and sell it today you would earn a total of 109.00 from holding Mitsui Chemicals ADR or generate 9.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitsui Chemicals ADR vs. Dow Jones Industrial
Performance |
| Timeline |
Mitsui Chemicals and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Mitsui Chemicals ADR
Pair trading matchups for Mitsui Chemicals
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Mitsui Chemicals and Dow Jones
The main advantage of trading using opposite Mitsui Chemicals and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsui Chemicals position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Mitsui Chemicals vs. Arkema SA | Mitsui Chemicals vs. Arkema SA ADR | Mitsui Chemicals vs. Croda International PLC | Mitsui Chemicals vs. Johnson Matthey Plc |
| Dow Jones vs. Wizz Air Holdings | Dow Jones vs. Orion Office Reit | Dow Jones vs. Sinclair Broadcast Group | Dow Jones vs. Ryanair Holdings PLC |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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