Correlation Between Mitsubishi UFJ and Stella Jones
Can any of the company-specific risk be diversified away by investing in both Mitsubishi UFJ and Stella Jones 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 Stella Jones 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 Stella Jones, you can compare the effects of market volatilities on Mitsubishi UFJ and Stella Jones 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 Stella Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi UFJ and Stella Jones.
Diversification Opportunities for Mitsubishi UFJ and Stella Jones
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mitsubishi and Stella is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi UFJ Financial and Stella Jones in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stella Jones 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 Stella Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stella Jones has no effect on the direction of Mitsubishi UFJ i.e., Mitsubishi UFJ and Stella Jones go up and down completely randomly.
Pair Corralation between Mitsubishi UFJ and Stella Jones
Given the investment horizon of 90 days Mitsubishi UFJ Financial is expected to generate 0.52 times more return on investment than Stella Jones. However, Mitsubishi UFJ Financial is 1.92 times less risky than Stella Jones. It trades about 0.35 of its potential returns per unit of risk. Stella Jones is currently generating about -0.24 per unit of risk. If you would invest 1,029 in Mitsubishi UFJ Financial on August 28, 2024 and sell it today you would earn a total of 152.00 from holding Mitsubishi UFJ Financial or generate 14.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitsubishi UFJ Financial vs. Stella Jones
Performance |
| Timeline |
| Mitsubishi UFJ Financial |
| Stella Jones |
Mitsubishi UFJ and Stella Jones Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsubishi UFJ and Stella Jones
The main advantage of trading using opposite Mitsubishi UFJ and Stella Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi UFJ position performs unexpectedly, Stella Jones 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 Stella Jones will offset losses from the drop in Stella Jones' 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 |
| Stella Jones vs. Canfor | Stella Jones vs. West Fraser Timber | Stella Jones vs. Interfor | Stella Jones vs. Svenska Cellulosa Aktiebolaget |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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