Correlation Between HE Equipment and Mitsubishi UFJ

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

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

Diversification Opportunities for HE Equipment and Mitsubishi UFJ

-0.03

Correlation Coefficient

HE Equipment  Mitsubishi UFJ

Good diversification

The 3 months correlation between HEES and Mitsubishi is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding HE Equipment Services 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 HE Equipment 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 HE Equipment Services 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 HE Equipment i.e., HE Equipment and Mitsubishi UFJ go up and down completely randomly.

Pair Corralation between HE Equipment and Mitsubishi UFJ

Given the investment horizon of 90 days HE Equipment Services is expected to generate 0.33 times more return on investment than Mitsubishi UFJ. However, HE Equipment Services is 3.03 times less risky than Mitsubishi UFJ. It trades about 0.26 of its potential returns per unit of risk. Mitsubishi UFJ Lease is currently generating about 0.05 per unit of risk. If you would invest  9,060  in HE Equipment Services on May 7, 2025 and sell it today you would earn a total of  404.00  from holding HE Equipment Services or generate 4.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	28.13%
Values	Daily Returns

HE Equipment Services  vs.  Mitsubishi UFJ Lease

HE Equipment Services

Risk-Adjusted Performance

Solid

Over the last 90 days HE Equipment Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively weak technical and fundamental indicators, HE Equipment unveiled solid returns over the last few months and may actually be approaching a breakup point.

Mitsubishi UFJ Lease

Risk-Adjusted Performance

Soft

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 fragile technical and fundamental indicators, Mitsubishi UFJ may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with HE Equipment and Mitsubishi UFJ

The main advantage of trading using opposite HE Equipment and Mitsubishi UFJ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HE Equipment 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 HE Equipment Services 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.