Correlation Between Mitsubishi UFJ and Refinaria
Can any of the company-specific risk be diversified away by investing in both Mitsubishi UFJ and Refinaria 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 Refinaria 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 Refinaria de Petrleos, you can compare the effects of market volatilities on Mitsubishi UFJ and Refinaria 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 Refinaria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi UFJ and Refinaria.
Diversification Opportunities for Mitsubishi UFJ and Refinaria
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mitsubishi and Refinaria is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi UFJ Financial and Refinaria de Petrleos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Refinaria de Petrleos 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 Refinaria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Refinaria de Petrleos has no effect on the direction of Mitsubishi UFJ i.e., Mitsubishi UFJ and Refinaria go up and down completely randomly.
Pair Corralation between Mitsubishi UFJ and Refinaria
Assuming the 90 days trading horizon Mitsubishi UFJ Financial is expected to generate 0.78 times more return on investment than Refinaria. However, Mitsubishi UFJ Financial is 1.28 times less risky than Refinaria. It trades about 0.4 of its potential returns per unit of risk. Refinaria de Petrleos is currently generating about -0.3 per unit of risk. If you would invest 5,768 in Mitsubishi UFJ Financial on August 30, 2024 and sell it today you would earn a total of 1,120 from holding Mitsubishi UFJ Financial or generate 19.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitsubishi UFJ Financial vs. Refinaria de Petrleos
Performance |
| Timeline |
| Mitsubishi UFJ Financial |
| Refinaria de Petrleos |
Mitsubishi UFJ and Refinaria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsubishi UFJ and Refinaria
The main advantage of trading using opposite Mitsubishi UFJ and Refinaria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi UFJ position performs unexpectedly, Refinaria 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 Refinaria will offset losses from the drop in Refinaria's long position.| Mitsubishi UFJ vs. Banco Santander SA | Mitsubishi UFJ vs. Sumitomo Mitsui Financial | Mitsubishi UFJ vs. Banco do Estado |
| Refinaria vs. Petrleo Brasileiro SA | Refinaria vs. Banco Bradesco SA | Refinaria vs. Schlumberger Limited | Refinaria vs. Ita Unibanco Holding |
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 CEOs Directory module to screen CEOs from public companies around the world.
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