Correlation Between Mitsubishi UFJ and Saturn Oil
Can any of the company-specific risk be diversified away by investing in both Mitsubishi UFJ and Saturn Oil 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 Saturn Oil 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 Saturn Oil Gas, you can compare the effects of market volatilities on Mitsubishi UFJ and Saturn Oil 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 Saturn Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi UFJ and Saturn Oil.
Diversification Opportunities for Mitsubishi UFJ and Saturn Oil
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mitsubishi and Saturn is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi UFJ Financial and Saturn Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saturn Oil Gas 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 Saturn Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saturn Oil Gas has no effect on the direction of Mitsubishi UFJ i.e., Mitsubishi UFJ and Saturn Oil go up and down completely randomly.
Pair Corralation between Mitsubishi UFJ and Saturn Oil
Assuming the 90 days horizon Mitsubishi UFJ Financial is expected to generate 1.29 times more return on investment than Saturn Oil. However, Mitsubishi UFJ is 1.29 times more volatile than Saturn Oil Gas. It trades about 0.07 of its potential returns per unit of risk. Saturn Oil Gas is currently generating about 0.0 per unit of risk. If you would invest 494.00 in Mitsubishi UFJ Financial on August 24, 2024 and sell it today you would earn a total of 588.00 from holding Mitsubishi UFJ Financial or generate 119.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.34% |
| Values | Daily Returns |
Mitsubishi UFJ Financial vs. Saturn Oil Gas
Performance |
| Timeline |
| Mitsubishi UFJ Financial |
| Saturn Oil Gas |
Mitsubishi UFJ and Saturn Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsubishi UFJ and Saturn Oil
The main advantage of trading using opposite Mitsubishi UFJ and Saturn Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi UFJ position performs unexpectedly, Saturn Oil 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 Saturn Oil will offset losses from the drop in Saturn Oil's long position.| Mitsubishi UFJ vs. Svenska Handelsbanken PK | Mitsubishi UFJ vs. ANZ Group Holdings | Mitsubishi UFJ vs. Westpac Banking | Mitsubishi UFJ vs. National Australia Bank |
| Saturn Oil vs. San Leon Energy | Saturn Oil vs. Enwell Energy plc | Saturn Oil vs. Dno ASA | Saturn Oil vs. Questerre Energy |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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