Correlation Between Mitsubishi UFJ and ING Groep
Can any of the company-specific risk be diversified away by investing in both Mitsubishi UFJ and ING Groep 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 ING Groep 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 ING Groep NV, you can compare the effects of market volatilities on Mitsubishi UFJ and ING Groep 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 ING Groep. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi UFJ and ING Groep.
Diversification Opportunities for Mitsubishi UFJ and ING Groep
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mitsubishi and ING is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi UFJ Financial and ING Groep NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ING Groep NV 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 ING Groep. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ING Groep NV has no effect on the direction of Mitsubishi UFJ i.e., Mitsubishi UFJ and ING Groep go up and down completely randomly.
Pair Corralation between Mitsubishi UFJ and ING Groep
Given the investment horizon of 90 days Mitsubishi UFJ is expected to generate 1.12 times less return on investment than ING Groep. In addition to that, Mitsubishi UFJ is 1.63 times more volatile than ING Groep NV. It trades about 0.2 of its total potential returns per unit of risk. ING Groep NV is currently generating about 0.36 per unit of volatility. If you would invest 1,520 in ING Groep NV on November 4, 2024 and sell it today you would earn a total of 129.00 from holding ING Groep NV or generate 8.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitsubishi UFJ Financial vs. ING Groep NV
Performance |
| Timeline |
| Mitsubishi UFJ Financial |
| ING Groep NV |
Mitsubishi UFJ and ING Groep Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsubishi UFJ and ING Groep
The main advantage of trading using opposite Mitsubishi UFJ and ING Groep positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi UFJ position performs unexpectedly, ING Groep 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 ING Groep will offset losses from the drop in ING Groep's long position.| Mitsubishi UFJ vs. Sumitomo Mitsui Financial | Mitsubishi UFJ vs. Mizuho Financial Group | Mitsubishi UFJ vs. Nomura Holdings ADR | Mitsubishi UFJ vs. Natwest Group PLC |
| ING Groep vs. Bank of America | ING Groep vs. Citigroup | ING Groep vs. Wells Fargo | ING Groep vs. Toronto Dominion Bank |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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