Correlation Between Mitsubishi UFJ and CCL Industries
Can any of the company-specific risk be diversified away by investing in both Mitsubishi UFJ and CCL Industries 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 CCL Industries 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 CCL Industries, you can compare the effects of market volatilities on Mitsubishi UFJ and CCL Industries 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 CCL Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi UFJ and CCL Industries.
Diversification Opportunities for Mitsubishi UFJ and CCL Industries
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mitsubishi and CCL is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi UFJ Financial and CCL Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCL Industries 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 CCL Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCL Industries has no effect on the direction of Mitsubishi UFJ i.e., Mitsubishi UFJ and CCL Industries go up and down completely randomly.
Pair Corralation between Mitsubishi UFJ and CCL Industries
Assuming the 90 days horizon Mitsubishi UFJ Financial is expected to generate 1.71 times more return on investment than CCL Industries. However, Mitsubishi UFJ is 1.71 times more volatile than CCL Industries. It trades about 0.05 of its potential returns per unit of risk. CCL Industries is currently generating about 0.04 per unit of risk. If you would invest 680.00 in Mitsubishi UFJ Financial on August 26, 2024 and sell it today you would earn a total of 402.00 from holding Mitsubishi UFJ Financial or generate 59.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.65% |
| Values | Daily Returns |
Mitsubishi UFJ Financial vs. CCL Industries
Performance |
| Timeline |
| Mitsubishi UFJ Financial |
| CCL Industries |
Mitsubishi UFJ and CCL Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsubishi UFJ and CCL Industries
The main advantage of trading using opposite Mitsubishi UFJ and CCL Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi UFJ position performs unexpectedly, CCL Industries 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 CCL Industries will offset losses from the drop in CCL Industries' long position.| Mitsubishi UFJ vs. ANZ Group Holdings | Mitsubishi UFJ vs. Agricultural Bank | Mitsubishi UFJ vs. Industrial and Commercial | Mitsubishi UFJ vs. Bank of America |
| CCL Industries vs. Myers Industries | CCL Industries vs. Silgan Holdings | CCL Industries vs. Pactiv Evergreen | CCL Industries vs. Reynolds Consumer Products |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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