Correlation Between Credit Acceptance and Mitsubishi UFJ
Can any of the company-specific risk be diversified away by investing in both Credit Acceptance 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 Credit Acceptance and Mitsubishi UFJ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Credit Acceptance and Mitsubishi UFJ Financial, you can compare the effects of market volatilities on Credit Acceptance 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 Credit Acceptance with a short position of Mitsubishi UFJ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Acceptance and Mitsubishi UFJ.
Diversification Opportunities for Credit Acceptance and Mitsubishi UFJ
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Credit and Mitsubishi is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Credit Acceptance 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 Credit Acceptance 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 Credit Acceptance 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 Credit Acceptance i.e., Credit Acceptance and Mitsubishi UFJ go up and down completely randomly.
Pair Corralation between Credit Acceptance and Mitsubishi UFJ
Assuming the 90 days trading horizon Credit Acceptance is expected to generate 3.66 times less return on investment than Mitsubishi UFJ. But when comparing it to its historical volatility, Credit Acceptance is 1.32 times less risky than Mitsubishi UFJ. It trades about 0.03 of its potential returns per unit of risk. Mitsubishi UFJ Financial is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,703 in Mitsubishi UFJ Financial on August 27, 2024 and sell it today you would earn a total of 4,094 from holding Mitsubishi UFJ Financial or generate 151.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 89.47% |
| Values | Daily Returns |
Credit Acceptance vs. Mitsubishi UFJ Financial
Performance |
| Timeline |
| Credit Acceptance |
| Mitsubishi UFJ Financial |
Credit Acceptance and Mitsubishi UFJ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Acceptance and Mitsubishi UFJ
The main advantage of trading using opposite Credit Acceptance and Mitsubishi UFJ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Acceptance 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.| Credit Acceptance vs. Capital One Financial | Credit Acceptance vs. Bread Financial Holdings | Credit Acceptance vs. Fras le SA | Credit Acceptance vs. Clave Indices De |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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