Correlation Between INTNED and Mitsubishi UFJ

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

By analyzing existing cross correlation between INTNED 65 and Mitsubishi UFJ Lease, you can compare the effects of market volatilities on INTNED 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 INTNED with a short position of Mitsubishi UFJ. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTNED and Mitsubishi UFJ.

Diversification Opportunities for INTNED and Mitsubishi UFJ

-0.27

Correlation Coefficient

INTNED  Mitsubishi UFJ

Very good diversification

The 3 months correlation between INTNED and Mitsubishi is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding INTNED 65 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 INTNED 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 INTNED 65 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 INTNED i.e., INTNED and Mitsubishi UFJ go up and down completely randomly.

Pair Corralation between INTNED and Mitsubishi UFJ

Assuming the 90 days trading horizon INTNED is expected to generate 11.26 times less return on investment than Mitsubishi UFJ. But when comparing it to its historical volatility, INTNED 65 is 2.74 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 0.05 of returns per unit of risk over similar time horizon. If you would invest  848.00  in Mitsubishi UFJ Lease on October 23, 2024 and sell it today you would earn a total of  537.00  from holding Mitsubishi UFJ Lease or generate 63.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	83.44%
Values	Daily Returns

INTNED 65  vs.  Mitsubishi UFJ Lease

INTNED 65

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INTNED 65 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, INTNED is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mitsubishi UFJ Lease

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mitsubishi UFJ Lease are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain technical and fundamental indicators, Mitsubishi UFJ may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with INTNED and Mitsubishi UFJ

The main advantage of trading using opposite INTNED and Mitsubishi UFJ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTNED 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 INTNED 65 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.