Correlation Between GENERAL and Mitsubishi UFJ
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By analyzing existing cross correlation between GENERAL MTRS 625 and Mitsubishi UFJ Lease, you can compare the effects of market volatilities on GENERAL 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 GENERAL with a short position of Mitsubishi UFJ. Check out your portfolio center. Please also check ongoing floating volatility patterns of GENERAL and Mitsubishi UFJ.
Diversification Opportunities for GENERAL and Mitsubishi UFJ
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GENERAL and Mitsubishi is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding GENERAL MTRS 625 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 GENERAL 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 GENERAL MTRS 625 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 GENERAL i.e., GENERAL and Mitsubishi UFJ go up and down completely randomly.
Pair Corralation between GENERAL and Mitsubishi UFJ
Assuming the 90 days trading horizon GENERAL is expected to generate 22.45 times less return on investment than Mitsubishi UFJ. But when comparing it to its historical volatility, GENERAL MTRS 625 is 4.05 times less risky than Mitsubishi UFJ. It trades about 0.01 of its potential returns per unit of risk. Mitsubishi UFJ Lease is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 848.00 in Mitsubishi UFJ Lease on September 12, 2024 and sell it today you would earn a total of 500.00 from holding Mitsubishi UFJ Lease or generate 58.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 51.57% |
| Values | Daily Returns |
GENERAL MTRS 625 vs. Mitsubishi UFJ Lease
Performance |
| Timeline |
| GENERAL MTRS 625 |
| Mitsubishi UFJ Lease |
GENERAL and Mitsubishi UFJ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GENERAL and Mitsubishi UFJ
The main advantage of trading using opposite GENERAL and Mitsubishi UFJ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GENERAL 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.The idea behind GENERAL MTRS 625 and Mitsubishi UFJ Lease 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.| Mitsubishi UFJ vs. Kaltura | Mitsubishi UFJ vs. Arrow Electronics | Mitsubishi UFJ vs. East Africa Metals | Mitsubishi UFJ vs. Western Digital |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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