Correlation Between Mitsubishi UFJ and ExcelFin Acquisition

Can any of the company-specific risk be diversified away by investing in both Mitsubishi UFJ and ExcelFin Acquisition 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 ExcelFin Acquisition 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 ExcelFin Acquisition Corp, you can compare the effects of market volatilities on Mitsubishi UFJ and ExcelFin Acquisition 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 ExcelFin Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi UFJ and ExcelFin Acquisition.

Diversification Opportunities for Mitsubishi UFJ and ExcelFin Acquisition

0.0

Correlation Coefficient

Mitsubishi UFJ  ExcelFin Acquisition

Pay attention - limited upside

The 3 months correlation between Mitsubishi and ExcelFin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi UFJ Financial and ExcelFin Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ExcelFin Acquisition Corp 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 ExcelFin Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ExcelFin Acquisition Corp has no effect on the direction of Mitsubishi UFJ i.e., Mitsubishi UFJ and ExcelFin Acquisition go up and down completely randomly.

Pair Corralation between Mitsubishi UFJ and ExcelFin Acquisition

If you would invest  1,065  in Mitsubishi UFJ Financial on December 28, 2024 and sell it today you would earn a total of  359.00  from holding Mitsubishi UFJ Financial or generate 33.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Mitsubishi UFJ Financial  vs.  ExcelFin Acquisition Corp

Mitsubishi UFJ Financial

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mitsubishi UFJ Financial are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak forward-looking indicators, Mitsubishi UFJ reported solid returns over the last few months and may actually be approaching a breakup point.

ExcelFin Acquisition Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days ExcelFin Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, ExcelFin Acquisition is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Mitsubishi UFJ and ExcelFin Acquisition

The main advantage of trading using opposite Mitsubishi UFJ and ExcelFin Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi UFJ position performs unexpectedly, ExcelFin Acquisition 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 ExcelFin Acquisition will offset losses from the drop in ExcelFin Acquisition's long position.

The idea behind Mitsubishi UFJ Financial and ExcelFin Acquisition Corp 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.