Correlation Between Mitsubishi UFJ and Astra International
Can any of the company-specific risk be diversified away by investing in both Mitsubishi UFJ and Astra International 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 Astra International 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 Astra International Tbk, you can compare the effects of market volatilities on Mitsubishi UFJ and Astra International 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 Astra International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi UFJ and Astra International.
Diversification Opportunities for Mitsubishi UFJ and Astra International
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mitsubishi and Astra is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi UFJ Financial and Astra International Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astra International Tbk 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 Astra International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astra International Tbk has no effect on the direction of Mitsubishi UFJ i.e., Mitsubishi UFJ and Astra International go up and down completely randomly.
Pair Corralation between Mitsubishi UFJ and Astra International
Given the investment horizon of 90 days Mitsubishi UFJ Financial is expected to generate 1.13 times more return on investment than Astra International. However, Mitsubishi UFJ is 1.13 times more volatile than Astra International Tbk. It trades about 0.14 of its potential returns per unit of risk. Astra International Tbk is currently generating about -0.05 per unit of risk. If you would invest 1,208 in Mitsubishi UFJ Financial on November 9, 2024 and sell it today you would earn a total of 59.00 from holding Mitsubishi UFJ Financial or generate 4.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitsubishi UFJ Financial vs. Astra International Tbk
Performance |
| Timeline |
| Mitsubishi UFJ Financial |
| Astra International Tbk |
Mitsubishi UFJ and Astra International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsubishi UFJ and Astra International
The main advantage of trading using opposite Mitsubishi UFJ and Astra International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi UFJ position performs unexpectedly, Astra International 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 Astra International will offset losses from the drop in Astra International'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 |
| Astra International vs. Allison Transmission Holdings | Astra International vs. Luminar Technologies | Astra International vs. Lear Corporation | Astra International vs. BorgWarner |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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