Correlation Between BIONTECH and Mitsubishi UFJ
Can any of the company-specific risk be diversified away by investing in both BIONTECH 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 BIONTECH and Mitsubishi UFJ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BIONTECH SE DRN and Mitsubishi UFJ Financial, you can compare the effects of market volatilities on BIONTECH 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 BIONTECH with a short position of Mitsubishi UFJ. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIONTECH and Mitsubishi UFJ.
Diversification Opportunities for BIONTECH and Mitsubishi UFJ
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BIONTECH and Mitsubishi is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding BIONTECH SE DRN 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 BIONTECH 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 BIONTECH SE DRN 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 BIONTECH i.e., BIONTECH and Mitsubishi UFJ go up and down completely randomly.
Pair Corralation between BIONTECH and Mitsubishi UFJ
Assuming the 90 days trading horizon BIONTECH SE DRN is expected to generate 1.04 times more return on investment than Mitsubishi UFJ. However, BIONTECH is 1.04 times more volatile than Mitsubishi UFJ Financial. It trades about 0.09 of its potential returns per unit of risk. Mitsubishi UFJ Financial is currently generating about -0.17 per unit of risk. If you would invest 4,528 in BIONTECH SE DRN on October 12, 2024 and sell it today you would earn a total of 152.00 from holding BIONTECH SE DRN or generate 3.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BIONTECH SE DRN vs. Mitsubishi UFJ Financial
Performance |
| Timeline |
| BIONTECH SE DRN |
| Mitsubishi UFJ Financial |
BIONTECH and Mitsubishi UFJ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BIONTECH and Mitsubishi UFJ
The main advantage of trading using opposite BIONTECH and Mitsubishi UFJ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIONTECH 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.| BIONTECH vs. CVS Health | BIONTECH vs. The Home Depot | BIONTECH vs. Guidewire Software, | BIONTECH vs. Pentair plc |
| Mitsubishi UFJ vs. Hospital Mater Dei | Mitsubishi UFJ vs. Trane Technologies plc | Mitsubishi UFJ vs. Paycom Software | Mitsubishi UFJ vs. BIONTECH SE DRN |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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