Correlation Between Kandi Technologies and Mitsubishi UFJ

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

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

Diversification Opportunities for Kandi Technologies and Mitsubishi UFJ

0.7

Correlation Coefficient

Kandi Technologies  Mitsubishi UFJ

Poor diversification

The 3 months correlation between Kandi and Mitsubishi is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Kandi Technologies Group 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 Kandi Technologies 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 Kandi Technologies Group 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 Kandi Technologies i.e., Kandi Technologies and Mitsubishi UFJ go up and down completely randomly.

Pair Corralation between Kandi Technologies and Mitsubishi UFJ

Given the investment horizon of 90 days Kandi Technologies Group is expected to under-perform the Mitsubishi UFJ. In addition to that, Kandi Technologies is 1.53 times more volatile than Mitsubishi UFJ Lease. It trades about -0.1 of its total potential returns per unit of risk. Mitsubishi UFJ Lease is currently generating about -0.06 per unit of volatility. If you would invest  1,392  in Mitsubishi UFJ Lease on September 5, 2024 and sell it today you would lose (196.00) from holding Mitsubishi UFJ Lease or give up 14.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Kandi Technologies Group  vs.  Mitsubishi UFJ Lease

Kandi Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kandi Technologies Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

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 weak 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 Kandi Technologies and Mitsubishi UFJ

The main advantage of trading using opposite Kandi Technologies and Mitsubishi UFJ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kandi Technologies 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 Kandi Technologies Group 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.

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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.