Correlation Between Boston Omaha and Mitsubishi UFJ

Can any of the company-specific risk be diversified away by investing in both Boston Omaha 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 Boston Omaha and Mitsubishi UFJ into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Boston Omaha Corp and Mitsubishi UFJ Lease, you can compare the effects of market volatilities on Boston Omaha 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 Boston Omaha with a short position of Mitsubishi UFJ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Omaha and Mitsubishi UFJ.

Diversification Opportunities for Boston Omaha and Mitsubishi UFJ

0.03

Correlation Coefficient

Boston Omaha  Mitsubishi UFJ

Significant diversification

The 3 months correlation between Boston and Mitsubishi is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Boston Omaha Corp 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 Boston Omaha 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 Boston Omaha Corp 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 Boston Omaha i.e., Boston Omaha and Mitsubishi UFJ go up and down completely randomly.

Pair Corralation between Boston Omaha and Mitsubishi UFJ

Considering the 90-day investment horizon Boston Omaha Corp is expected to under-perform the Mitsubishi UFJ. But the stock apears to be less risky and, when comparing its historical volatility, Boston Omaha Corp is 2.43 times less risky than Mitsubishi UFJ. The stock trades about -0.06 of its potential returns per unit of risk. The Mitsubishi UFJ Lease is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  848.00  in Mitsubishi UFJ Lease on October 10, 2024 and sell it today you would earn a total of  387.00  from holding Mitsubishi UFJ Lease or generate 45.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	65.86%
Values	Daily Returns

Boston Omaha Corp  vs.  Mitsubishi UFJ Lease

Boston Omaha Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boston Omaha Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Boston Omaha is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Mitsubishi UFJ Lease

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mitsubishi UFJ Lease has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Boston Omaha and Mitsubishi UFJ

The main advantage of trading using opposite Boston Omaha and Mitsubishi UFJ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Omaha 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 Boston Omaha Corp 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.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.