Correlation Between Icahn Enterprises and Mitsui

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

By analyzing existing cross correlation between Icahn Enterprises LP and Mitsui Company, you can compare the effects of market volatilities on Icahn Enterprises and Mitsui 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 Icahn Enterprises with a short position of Mitsui. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icahn Enterprises and Mitsui.

Diversification Opportunities for Icahn Enterprises and Mitsui

-0.4

Correlation Coefficient

Icahn Enterprises  Mitsui

Very good diversification

The 3 months correlation between Icahn and Mitsui is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Icahn Enterprises LP and Mitsui Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsui Company and Icahn Enterprises 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 Icahn Enterprises LP are associated (or correlated) with Mitsui. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsui Company has no effect on the direction of Icahn Enterprises i.e., Icahn Enterprises and Mitsui go up and down completely randomly.

Pair Corralation between Icahn Enterprises and Mitsui

If you would invest  1,172  in Icahn Enterprises LP on September 4, 2024 and sell it today you would lose (60.00) from holding Icahn Enterprises LP or give up 5.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Icahn Enterprises LP  vs.  Mitsui Company

Icahn Enterprises

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Icahn Enterprises LP has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Icahn Enterprises is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Mitsui Company

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mitsui Company has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Mitsui is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Icahn Enterprises and Mitsui

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

The idea behind Icahn Enterprises LP and Mitsui Company 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.