MITSUBISHI UFJ FINANCIAL GROUP INC (FOREIGN)

5.14 -0.01 (-0.19%) Sell

The party never started for MUFG investors as it delivered massive losses

13 min read

MITSUBISHI UFJ FINANCIAL GROUP INC (Foreign) significantly underperformed on Thursday. It returned -0.19% to close at 5.14. On a day when the overall market breadth was 35%, it closed higher than 66% of the market. In comparison, the benchmark SP500 index closed today at -0.0002%.

[Themes containing MUFG]

MUFG is currently in a down trend. Over the last three months 2 bearish signals have generated a profit of +13.79% for investors.

Trend

MUFG has been underperforming the SP500 index in recent time, after having outperformed till 5 Jan, 2016. Over the last 2 years 11 months and 9 days, MUFG underperformed the SP500 index on 50% days. Which indicates that on days MUFG underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months MUFG was mostly loss making and delivered on average -0.25% per day. It's best return during this period (of +2.79%) was on Thursday, 25 Oct, 2018. While it's worst loss in the same period (of -4.03%) was on Tuesday, 4 Dec, 2018. There was initially a bullish trend during this period which started on 14 Sep, 2018 and went on till 21 Sep, 2018. The bullish trend returned +5.65% to investors. This was followed by a bearish trend that started on 9 Oct, 2018 and ended on 15 Oct, 2018. This bearish trend lost -6.68% of investor capital.

On monthly basis, MUFG delivered losses in more months over the last year, than profits. MUFG delivered profits less regularly than SP500 index. MUFG significantly outperformed SP500 index in Jul 2018, when it returned +10.87% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. MUFG had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Oct 2018 to Dec 2018) during which period it delivered -18.97%. It is interesting to note that both MUFG and SP500 index significantly outperform during months when quarterly/annual results are announced.

Money is not the only answer, but it makes a difference.
-- Barack Obama

MUFG is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in MUFG's volatility from 3 Oct, 2018 to 11 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 14 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that MUFG has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.

SP500 index has more chance of extreme outcomes than MUFG. Therefore, SP500 must receive a lower allocation than MUFG in your portfolio. SP500 index usually has shorter drawdown period than MUFG.

Based on your interest in MUFG you may find it interesting to know that AMZN and CSCO are both large caps that have shown remarkable performance and deserve to be on every investors' watchlist.

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