Correlation Between Mitsubishi UFJ and Svenska Handelsbanken
Can any of the company-specific risk be diversified away by investing in both Mitsubishi UFJ and Svenska Handelsbanken 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 Svenska Handelsbanken 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 Svenska Handelsbanken AB, you can compare the effects of market volatilities on Mitsubishi UFJ and Svenska Handelsbanken 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 Svenska Handelsbanken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi UFJ and Svenska Handelsbanken.
Diversification Opportunities for Mitsubishi UFJ and Svenska Handelsbanken
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mitsubishi and Svenska is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi UFJ Financial and Svenska Handelsbanken AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Svenska Handelsbanken 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 Svenska Handelsbanken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Svenska Handelsbanken has no effect on the direction of Mitsubishi UFJ i.e., Mitsubishi UFJ and Svenska Handelsbanken go up and down completely randomly.
Pair Corralation between Mitsubishi UFJ and Svenska Handelsbanken
Assuming the 90 days horizon Mitsubishi UFJ Financial is expected to generate 1.29 times more return on investment than Svenska Handelsbanken. However, Mitsubishi UFJ is 1.29 times more volatile than Svenska Handelsbanken AB. It trades about 0.18 of its potential returns per unit of risk. Svenska Handelsbanken AB is currently generating about -0.1 per unit of risk. If you would invest 978.00 in Mitsubishi UFJ Financial on August 30, 2024 and sell it today you would earn a total of 104.00 from holding Mitsubishi UFJ Financial or generate 10.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Mitsubishi UFJ Financial vs. Svenska Handelsbanken AB
Performance |
| Timeline |
| Mitsubishi UFJ Financial |
| Svenska Handelsbanken |
Mitsubishi UFJ and Svenska Handelsbanken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsubishi UFJ and Svenska Handelsbanken
The main advantage of trading using opposite Mitsubishi UFJ and Svenska Handelsbanken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi UFJ position performs unexpectedly, Svenska Handelsbanken 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 Svenska Handelsbanken will offset losses from the drop in Svenska Handelsbanken's long position.| Mitsubishi UFJ vs. Banco Bilbao Vizcaya | Mitsubishi UFJ vs. ABN AMRO Bank | Mitsubishi UFJ vs. ING Groep NV | Mitsubishi UFJ vs. Banco de Sabadell |
| Svenska Handelsbanken vs. ANZ Group Holdings | Svenska Handelsbanken vs. National Australia Bank | Svenska Handelsbanken vs. Agricultural Bank | Svenska Handelsbanken vs. Industrial and Commercial |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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