Correlation Between Mitsubishi UFJ and Apple
Can any of the company-specific risk be diversified away by investing in both Mitsubishi UFJ and Apple 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 Apple 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 Apple Inc, you can compare the effects of market volatilities on Mitsubishi UFJ and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi UFJ and Apple.
Diversification Opportunities for Mitsubishi UFJ and Apple
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mitsubishi and Apple is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi UFJ Financial and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Mitsubishi UFJ i.e., Mitsubishi UFJ and Apple go up and down completely randomly.
Pair Corralation between Mitsubishi UFJ and Apple
Given the investment horizon of 90 days Mitsubishi UFJ Financial is expected to under-perform the Apple. But the stock apears to be less risky and, when comparing its historical volatility, Mitsubishi UFJ Financial is 1.42 times less risky than Apple. The stock trades about -0.01 of its potential returns per unit of risk. The Apple Inc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 17,003 in Apple Inc on February 1, 2024 and sell it today you would earn a total of 30.00 from holding Apple Inc or generate 0.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Mitsubishi UFJ Financial vs. Apple Inc
Performance |
Timeline |
Mitsubishi UFJ Financial |
Apple Inc |
Mitsubishi UFJ and Apple Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mitsubishi UFJ and Apple
The main advantage of trading using opposite Mitsubishi UFJ and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi UFJ position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.Mitsubishi UFJ vs. Sumitomo Mitsui Financial | Mitsubishi UFJ vs. Mizuho Financial Group | Mitsubishi UFJ vs. Nomura Holdings ADR | Mitsubishi UFJ vs. Natwest Group PLC |
Check out your portfolio center.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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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