Correlation Between Village Super and Mitsubishi UFJ

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

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

Diversification Opportunities for Village Super and Mitsubishi UFJ

-0.16

Correlation Coefficient

Village Super  Mitsubishi UFJ

Good diversification

The 3 months correlation between Village and Mitsubishi is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Village Super Market 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 Village Super 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 Village Super Market 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 Village Super i.e., Village Super and Mitsubishi UFJ go up and down completely randomly.

Pair Corralation between Village Super and Mitsubishi UFJ

Assuming the 90 days horizon Village Super is expected to generate 1.32 times less return on investment than Mitsubishi UFJ. But when comparing it to its historical volatility, Village Super Market is 1.89 times less risky than Mitsubishi UFJ. It trades about 0.1 of its potential returns per unit of risk. Mitsubishi UFJ Lease is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,323  in Mitsubishi UFJ Lease on December 24, 2024 and sell it today you would earn a total of  133.00  from holding Mitsubishi UFJ Lease or generate 10.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	85.0%
Values	Daily Returns

Village Super Market  vs.  Mitsubishi UFJ Lease

Village Super Market

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Village Super Market are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Village Super may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Mitsubishi UFJ Lease

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mitsubishi UFJ Lease are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, Mitsubishi UFJ showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Village Super and Mitsubishi UFJ

The main advantage of trading using opposite Village Super and Mitsubishi UFJ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Village Super 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 Village Super Market 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.