Correlation Between Mitsubishi UFJ and Autohome
Can any of the company-specific risk be diversified away by investing in both Mitsubishi UFJ and Autohome 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 Mitsubishi UFJ and Autohome into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsubishi UFJ Financial and Autohome, you can compare the effects of market volatilities on Mitsubishi UFJ and Autohome 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 Mitsubishi UFJ with a short position of Autohome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi UFJ and Autohome.
Diversification Opportunities for Mitsubishi UFJ and Autohome
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mitsubishi and Autohome is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi UFJ Financial and Autohome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autohome and Mitsubishi UFJ 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 Mitsubishi UFJ Financial are associated (or correlated) with Autohome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autohome has no effect on the direction of Mitsubishi UFJ i.e., Mitsubishi UFJ and Autohome go up and down completely randomly.
Pair Corralation between Mitsubishi UFJ and Autohome
Assuming the 90 days trading horizon Mitsubishi UFJ Financial is expected to generate 1.35 times more return on investment than Autohome. However, Mitsubishi UFJ is 1.35 times more volatile than Autohome. It trades about 0.33 of its potential returns per unit of risk. Autohome is currently generating about -0.01 per unit of risk. If you would invest 6,294 in Mitsubishi UFJ Financial on September 2, 2024 and sell it today you would earn a total of 825.00 from holding Mitsubishi UFJ Financial or generate 13.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitsubishi UFJ Financial vs. Autohome
Performance |
| Timeline |
| Mitsubishi UFJ Financial |
| Autohome |
Mitsubishi UFJ and Autohome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsubishi UFJ and Autohome
The main advantage of trading using opposite Mitsubishi UFJ and Autohome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi UFJ position performs unexpectedly, Autohome 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 Autohome will offset losses from the drop in Autohome's long position.| Mitsubishi UFJ vs. Fras le SA | Mitsubishi UFJ vs. Western Digital | Mitsubishi UFJ vs. Energisa SA | Mitsubishi UFJ vs. Clave Indices De |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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