Correlation Between Air Lease and Mitsubishi UFJ
Can any of the company-specific risk be diversified away by investing in both Air Lease 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 Air Lease and Mitsubishi UFJ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and Mitsubishi UFJ Lease, you can compare the effects of market volatilities on Air Lease 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 Air Lease with a short position of Mitsubishi UFJ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and Mitsubishi UFJ.
Diversification Opportunities for Air Lease and Mitsubishi UFJ
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Air and Mitsubishi is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Mitsubishi UFJ Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsubishi UFJ Lease and Air Lease 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 Air Lease 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 Lease has no effect on the direction of Air Lease i.e., Air Lease and Mitsubishi UFJ go up and down completely randomly.
Pair Corralation between Air Lease and Mitsubishi UFJ
Allowing for the 90-day total investment horizon Air Lease is expected to under-perform the Mitsubishi UFJ. But the stock apears to be less risky and, when comparing its historical volatility, Air Lease is 2.18 times less risky than Mitsubishi UFJ. The stock trades about -0.07 of its potential returns per unit of risk. The Mitsubishi UFJ Lease is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,286 in Mitsubishi UFJ Lease on October 23, 2024 and sell it today you would earn a total of 99.00 from holding Mitsubishi UFJ Lease or generate 7.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Air Lease vs. Mitsubishi UFJ Lease
Performance |
| Timeline |
| Air Lease |
| Mitsubishi UFJ Lease |
Air Lease and Mitsubishi UFJ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and Mitsubishi UFJ
The main advantage of trading using opposite Air Lease and Mitsubishi UFJ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease 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.| Air Lease vs. Alta Equipment Group | Air Lease vs. McGrath RentCorp | Air Lease vs. Herc Holdings | Air Lease vs. HE Equipment Services |
| Mitsubishi UFJ vs. Tarsus Pharmaceuticals | Mitsubishi UFJ vs. Village Super Market | Mitsubishi UFJ vs. Summit Therapeutics PLC | Mitsubishi UFJ vs. Lithia Motors |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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