Correlation Between Sellas Life and Mitsubishi UFJ
Can any of the company-specific risk be diversified away by investing in both Sellas Life and Mitsubishi UFJ 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 Sellas Life and Mitsubishi UFJ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sellas Life Sciences and Mitsubishi UFJ Lease, you can compare the effects of market volatilities on Sellas Life and Mitsubishi UFJ 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 Sellas Life with a short position of Mitsubishi UFJ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sellas Life and Mitsubishi UFJ.
Diversification Opportunities for Sellas Life and Mitsubishi UFJ
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sellas and Mitsubishi is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Sellas Life Sciences and Mitsubishi UFJ Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsubishi UFJ Lease and Sellas Life 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 Sellas Life Sciences are associated (or correlated) with Mitsubishi UFJ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsubishi UFJ Lease has no effect on the direction of Sellas Life i.e., Sellas Life and Mitsubishi UFJ go up and down completely randomly.
Pair Corralation between Sellas Life and Mitsubishi UFJ
Considering the 90-day investment horizon Sellas Life Sciences is expected to generate 0.84 times more return on investment than Mitsubishi UFJ. However, Sellas Life Sciences is 1.18 times less risky than Mitsubishi UFJ. It trades about 0.0 of its potential returns per unit of risk. Mitsubishi UFJ Lease is currently generating about -0.03 per unit of risk. If you would invest 117.00 in Sellas Life Sciences on September 4, 2024 and sell it today you would lose (1.00) from holding Sellas Life Sciences or give up 0.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sellas Life Sciences vs. Mitsubishi UFJ Lease
Performance |
| Timeline |
| Sellas Life Sciences |
| Mitsubishi UFJ Lease |
Sellas Life and Mitsubishi UFJ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sellas Life and Mitsubishi UFJ
The main advantage of trading using opposite Sellas Life and Mitsubishi UFJ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sellas Life position performs unexpectedly, Mitsubishi UFJ 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 Mitsubishi UFJ will offset losses from the drop in Mitsubishi UFJ's long position.| Sellas Life vs. Candel Therapeutics | Sellas Life vs. Cingulate Warrants | Sellas Life vs. Unicycive Therapeutics | Sellas Life vs. Cardio Diagnostics Holdings |
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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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