Correlation Between 26441CBU8 and Mitsubishi UFJ

Can any of the company-specific risk be diversified away by investing in both 26441CBU8 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 26441CBU8 and Mitsubishi UFJ into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DUK 5 15 AUG 52 and Mitsubishi UFJ Lease, you can compare the effects of market volatilities on 26441CBU8 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 26441CBU8 with a short position of Mitsubishi UFJ. Check out your portfolio center. Please also check ongoing floating volatility patterns of 26441CBU8 and Mitsubishi UFJ.

Diversification Opportunities for 26441CBU8 and Mitsubishi UFJ

0.28

Correlation Coefficient

26441CBU8  Mitsubishi UFJ

Modest diversification

The 3 months correlation between 26441CBU8 and Mitsubishi is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding DUK 5 15 AUG 52 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 26441CBU8 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 DUK 5 15 AUG 52 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 26441CBU8 i.e., 26441CBU8 and Mitsubishi UFJ go up and down completely randomly.

Pair Corralation between 26441CBU8 and Mitsubishi UFJ

Assuming the 90 days trading horizon DUK 5 15 AUG 52 is expected to under-perform the Mitsubishi UFJ. But the bond apears to be less risky and, when comparing its historical volatility, DUK 5 15 AUG 52 is 3.25 times less risky than Mitsubishi UFJ. The bond trades about -0.01 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	Very Weak
Accuracy	68.99%
Values	Daily Returns

DUK 5 15 AUG 52  vs.  Mitsubishi UFJ Lease

26441CBU8

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DUK 5 15 AUG 52 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for DUK 5 15 AUG 52 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 latest inconsistent 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 26441CBU8 and Mitsubishi UFJ

The main advantage of trading using opposite 26441CBU8 and Mitsubishi UFJ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 26441CBU8 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 DUK 5 15 AUG 52 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.