Correlation Between Mitsubishi UFJ and Second Sight

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

By analyzing existing cross correlation between Mitsubishi UFJ Lease and Second Sight Medical, you can compare the effects of market volatilities on Mitsubishi UFJ and Second Sight 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 Second Sight. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi UFJ and Second Sight.

Diversification Opportunities for Mitsubishi UFJ and Second Sight

-0.2

Correlation Coefficient

Mitsubishi UFJ  Second Sight

Good diversification

The 3 months correlation between Mitsubishi and Second is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi UFJ Lease and Second Sight Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Second Sight Medical 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 Lease are associated (or correlated) with Second Sight. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Second Sight Medical has no effect on the direction of Mitsubishi UFJ i.e., Mitsubishi UFJ and Second Sight go up and down completely randomly.

Pair Corralation between Mitsubishi UFJ and Second Sight

If you would invest  414.00  in Second Sight Medical on January 30, 2024 and sell it today you would earn a total of  0.00  from holding Second Sight Medical or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Mitsubishi UFJ Lease  vs.  Second Sight Medical

Mitsubishi UFJ Lease

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mitsubishi UFJ Lease are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, Mitsubishi UFJ is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Second Sight Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Second Sight Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Second Sight is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Mitsubishi UFJ and Second Sight

The main advantage of trading using opposite Mitsubishi UFJ and Second Sight positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi UFJ position performs unexpectedly, Second Sight 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 Second Sight will offset losses from the drop in Second Sight's long position.

The idea behind Mitsubishi UFJ Lease and Second Sight Medical 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.