Correlation Between Mitsui Chemicals and Agape ATP

Can any of the company-specific risk be diversified away by investing in both Mitsui Chemicals and Agape ATP 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 Agape ATP 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 Agape ATP, you can compare the effects of market volatilities on Mitsui Chemicals and Agape ATP 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 Agape ATP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsui Chemicals and Agape ATP.

Diversification Opportunities for Mitsui Chemicals and Agape ATP

-0.27

Correlation Coefficient

Mitsui Chemicals  Agape ATP

Very good diversification

The 3 months correlation between Mitsui and Agape is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Mitsui Chemicals ADR and Agape ATP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agape ATP 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 Agape ATP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agape ATP has no effect on the direction of Mitsui Chemicals i.e., Mitsui Chemicals and Agape ATP go up and down completely randomly.

Pair Corralation between Mitsui Chemicals and Agape ATP

Assuming the 90 days horizon Mitsui Chemicals ADR is expected to under-perform the Agape ATP. But the pink sheet apears to be less risky and, when comparing its historical volatility, Mitsui Chemicals ADR is 2.11 times less risky than Agape ATP. The pink sheet trades about -0.22 of its potential returns per unit of risk. The Agape ATP is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  124.00  in Agape ATP on September 5, 2025 and sell it today you would lose (2.00) from holding Agape ATP or give up 1.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Mitsui Chemicals ADR  vs.  Agape ATP

Mitsui Chemicals ADR

Risk-Adjusted Performance

Weakest

Over the last 90 days Mitsui Chemicals ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Agape ATP

Risk-Adjusted Performance

Weak

Over the last 90 days Agape ATP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Agape ATP is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Mitsui Chemicals and Agape ATP

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

The idea behind Mitsui Chemicals ADR and Agape ATP 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.