Correlation Between Svenska Handelsbanken and Mitsubishi UFJ
Can any of the company-specific risk be diversified away by investing in both Svenska Handelsbanken 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 Svenska Handelsbanken and Mitsubishi UFJ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Svenska Handelsbanken AB and Mitsubishi UFJ Financial, you can compare the effects of market volatilities on Svenska Handelsbanken 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 Svenska Handelsbanken with a short position of Mitsubishi UFJ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svenska Handelsbanken and Mitsubishi UFJ.
Diversification Opportunities for Svenska Handelsbanken and Mitsubishi UFJ
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Svenska and Mitsubishi is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Svenska Handelsbanken AB and Mitsubishi UFJ Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsubishi UFJ Financial and Svenska Handelsbanken 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 Svenska Handelsbanken AB 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 Financial has no effect on the direction of Svenska Handelsbanken i.e., Svenska Handelsbanken and Mitsubishi UFJ go up and down completely randomly.
Pair Corralation between Svenska Handelsbanken and Mitsubishi UFJ
Assuming the 90 days horizon Svenska Handelsbanken AB is expected to under-perform the Mitsubishi UFJ. But the pink sheet apears to be less risky and, when comparing its historical volatility, Svenska Handelsbanken AB is 1.45 times less risky than Mitsubishi UFJ. The pink sheet trades about -0.12 of its potential returns per unit of risk. The Mitsubishi UFJ Financial is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 978.00 in Mitsubishi UFJ Financial on August 27, 2024 and sell it today you would earn a total of 104.00 from holding Mitsubishi UFJ Financial or generate 10.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Svenska Handelsbanken AB vs. Mitsubishi UFJ Financial
Performance |
| Timeline |
| Svenska Handelsbanken |
| Mitsubishi UFJ Financial |
Svenska Handelsbanken and Mitsubishi UFJ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Svenska Handelsbanken and Mitsubishi UFJ
The main advantage of trading using opposite Svenska Handelsbanken and Mitsubishi UFJ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svenska Handelsbanken 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.| Svenska Handelsbanken vs. ANZ Group Holdings | Svenska Handelsbanken vs. Agricultural Bank | Svenska Handelsbanken vs. Industrial and Commercial | Svenska Handelsbanken vs. Bank of America |
| Mitsubishi UFJ vs. ANZ Group Holdings | Mitsubishi UFJ vs. Agricultural Bank | Mitsubishi UFJ vs. Industrial and Commercial | Mitsubishi UFJ vs. Bank of America |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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