Correlation Between Mitsubishi UFJ and Nulegacy Gold

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Mitsubishi UFJ and Nulegacy Gold 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 Nulegacy Gold 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 Nulegacy Gold, you can compare the effects of market volatilities on Mitsubishi UFJ and Nulegacy Gold 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 Nulegacy Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi UFJ and Nulegacy Gold.

Diversification Opportunities for Mitsubishi UFJ and Nulegacy Gold

-0.82
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Mitsubishi and Nulegacy is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi UFJ Financial and Nulegacy Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nulegacy Gold 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 Nulegacy Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nulegacy Gold has no effect on the direction of Mitsubishi UFJ i.e., Mitsubishi UFJ and Nulegacy Gold go up and down completely randomly.

Pair Corralation between Mitsubishi UFJ and Nulegacy Gold

Given the investment horizon of 90 days Mitsubishi UFJ is expected to generate 2.86 times less return on investment than Nulegacy Gold. But when comparing it to its historical volatility, Mitsubishi UFJ Financial is 20.03 times less risky than Nulegacy Gold. It trades about 0.29 of its potential returns per unit of risk. Nulegacy Gold is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  0.50  in Nulegacy Gold on September 1, 2024 and sell it today you would lose (0.35) from holding Nulegacy Gold or give up 70.0% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy95.45%
ValuesDaily Returns

Mitsubishi UFJ Financial  vs.  Nulegacy Gold

 Performance 
       Timeline  
Mitsubishi UFJ Financial 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Mitsubishi UFJ Financial are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Mitsubishi UFJ may actually be approaching a critical reversion point that can send shares even higher in December 2024.
Nulegacy Gold 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Nulegacy Gold are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Nulegacy Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Mitsubishi UFJ and Nulegacy Gold Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Mitsubishi UFJ and Nulegacy Gold

The main advantage of trading using opposite Mitsubishi UFJ and Nulegacy Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi UFJ position performs unexpectedly, Nulegacy Gold 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 Nulegacy Gold will offset losses from the drop in Nulegacy Gold's long position.
The idea behind Mitsubishi UFJ Financial and Nulegacy Gold pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

Other Complementary Tools

Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
FinTech Suite
Use AI to screen and filter profitable investment opportunities