Correlation Between ING Groep and Mitsubishi UFJ
Can any of the company-specific risk be diversified away by investing in both ING Groep 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 ING Groep and Mitsubishi UFJ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ING Groep NV and Mitsubishi UFJ Financial, you can compare the effects of market volatilities on ING Groep 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 ING Groep with a short position of Mitsubishi UFJ. Check out your portfolio center. Please also check ongoing floating volatility patterns of ING Groep and Mitsubishi UFJ.
Diversification Opportunities for ING Groep and Mitsubishi UFJ
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ING and Mitsubishi is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding ING Groep NV 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 ING Groep 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 ING Groep NV 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 ING Groep i.e., ING Groep and Mitsubishi UFJ go up and down completely randomly.
Pair Corralation between ING Groep and Mitsubishi UFJ
Assuming the 90 days horizon ING Groep NV is expected to generate 0.61 times more return on investment than Mitsubishi UFJ. However, ING Groep NV is 1.63 times less risky than Mitsubishi UFJ. It trades about 0.36 of its potential returns per unit of risk. Mitsubishi UFJ Financial is currently generating about 0.2 per unit of risk. If you would invest 1,520 in ING Groep NV on November 4, 2024 and sell it today you would earn a total of 129.00 from holding ING Groep NV or generate 8.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ING Groep NV vs. Mitsubishi UFJ Financial
Performance |
| Timeline |
| ING Groep NV |
| Mitsubishi UFJ Financial |
ING Groep and Mitsubishi UFJ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ING Groep and Mitsubishi UFJ
The main advantage of trading using opposite ING Groep and Mitsubishi UFJ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ING Groep 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.| ING Groep vs. Bank of America | ING Groep vs. Citigroup | ING Groep vs. Wells Fargo | ING Groep vs. Toronto Dominion Bank |
| Mitsubishi UFJ vs. Sumitomo Mitsui Financial | Mitsubishi UFJ vs. Mizuho Financial Group | Mitsubishi UFJ vs. Nomura Holdings ADR | Mitsubishi UFJ vs. Natwest Group PLC |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |