Correlation Between Proficient Auto and Mitsubishi UFJ

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

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

Diversification Opportunities for Proficient Auto and Mitsubishi UFJ

0.46

Correlation Coefficient

Proficient Auto  Mitsubishi UFJ

Very weak diversification

The 3 months correlation between Proficient and Mitsubishi is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Proficient Auto Logistics, 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 Proficient Auto 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 Proficient Auto Logistics, 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 Proficient Auto i.e., Proficient Auto and Mitsubishi UFJ go up and down completely randomly.

Pair Corralation between Proficient Auto and Mitsubishi UFJ

Considering the 90-day investment horizon Proficient Auto is expected to generate 3.01 times less return on investment than Mitsubishi UFJ. But when comparing it to its historical volatility, Proficient Auto Logistics, is 2.04 times less risky than Mitsubishi UFJ. It trades about 0.06 of its potential returns per unit of risk. Mitsubishi UFJ Lease is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,265  in Mitsubishi UFJ Lease on September 13, 2024 and sell it today you would earn a total of  83.00  from holding Mitsubishi UFJ Lease or generate 6.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Proficient Auto Logistics,  vs.  Mitsubishi UFJ Lease

Proficient Auto Logi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Proficient Auto Logistics, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

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 fairly strong technical and fundamental indicators, Mitsubishi UFJ is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Proficient Auto and Mitsubishi UFJ

The main advantage of trading using opposite Proficient Auto and Mitsubishi UFJ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Proficient Auto 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 Proficient Auto Logistics, 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.