Correlation Between Apollo Investment and Mitsubishi UFJ
Can any of the company-specific risk be diversified away by investing in both Apollo Investment and Mitsubishi UFJ 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 Apollo Investment and Mitsubishi UFJ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apollo Investment Corp and Mitsubishi UFJ Financial, you can compare the effects of market volatilities on Apollo Investment and Mitsubishi UFJ 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 Apollo Investment with a short position of Mitsubishi UFJ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Investment and Mitsubishi UFJ.
Diversification Opportunities for Apollo Investment and Mitsubishi UFJ
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Apollo and Mitsubishi is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Investment Corp and Mitsubishi UFJ Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsubishi UFJ Financial and Apollo Investment 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 Apollo Investment Corp are associated (or correlated) with Mitsubishi UFJ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsubishi UFJ Financial has no effect on the direction of Apollo Investment i.e., Apollo Investment and Mitsubishi UFJ go up and down completely randomly.
Pair Corralation between Apollo Investment and Mitsubishi UFJ
Assuming the 90 days trading horizon Apollo Investment is expected to generate 1.55 times less return on investment than Mitsubishi UFJ. But when comparing it to its historical volatility, Apollo Investment Corp is 1.57 times less risky than Mitsubishi UFJ. It trades about 0.08 of its potential returns per unit of risk. Mitsubishi UFJ Financial is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 565.00 in Mitsubishi UFJ Financial on September 12, 2024 and sell it today you would earn a total of 555.00 from holding Mitsubishi UFJ Financial or generate 98.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apollo Investment Corp vs. Mitsubishi UFJ Financial
Performance |
| Timeline |
| Apollo Investment Corp |
| Mitsubishi UFJ Financial |
Apollo Investment and Mitsubishi UFJ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Investment and Mitsubishi UFJ
The main advantage of trading using opposite Apollo Investment and Mitsubishi UFJ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Investment position performs unexpectedly, Mitsubishi UFJ 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 Mitsubishi UFJ will offset losses from the drop in Mitsubishi UFJ's long position.| Apollo Investment vs. Superior Plus Corp | Apollo Investment vs. SIVERS SEMICONDUCTORS AB | Apollo Investment vs. CHINA HUARONG ENERHD 50 | Apollo Investment vs. NORDIC HALIBUT AS |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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