Correlation Between HMM and UJU Electronics
Can any of the company-specific risk be diversified away by investing in both HMM and UJU Electronics 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 HMM and UJU Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HMM Co and UJU Electronics Co, you can compare the effects of market volatilities on HMM and UJU Electronics 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 HMM with a short position of UJU Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of HMM and UJU Electronics.
Diversification Opportunities for HMM and UJU Electronics
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between HMM and UJU is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding HMM Co and UJU Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UJU Electronics and HMM 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 HMM Co are associated (or correlated) with UJU Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UJU Electronics has no effect on the direction of HMM i.e., HMM and UJU Electronics go up and down completely randomly.
Pair Corralation between HMM and UJU Electronics
Assuming the 90 days trading horizon HMM is expected to generate 54.72 times less return on investment than UJU Electronics. But when comparing it to its historical volatility, HMM Co is 1.57 times less risky than UJU Electronics. It trades about 0.01 of its potential returns per unit of risk. UJU Electronics Co is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 1,376,635 in UJU Electronics Co on October 26, 2024 and sell it today you would earn a total of 773,365 from holding UJU Electronics Co or generate 56.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HMM Co vs. UJU Electronics Co
Performance |
| Timeline |
| HMM Co |
| UJU Electronics |
HMM and UJU Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HMM and UJU Electronics
The main advantage of trading using opposite HMM and UJU Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HMM position performs unexpectedly, UJU Electronics 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 UJU Electronics will offset losses from the drop in UJU Electronics' long position.| HMM vs. Dongbang Transport Logistics | HMM vs. BGF Retail Co | HMM vs. Shinhan Inverse Copper | HMM vs. Youngsin Metal Industrial |
| UJU Electronics vs. Samsung Electronics Co | UJU Electronics vs. Samsung Electronics Co | UJU Electronics vs. SK Hynix | UJU Electronics vs. HMM Co |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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