Correlation Between Union Materials and INFINITT Healthcare
Can any of the company-specific risk be diversified away by investing in both Union Materials and INFINITT Healthcare 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 Union Materials and INFINITT Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Union Materials Corp and INFINITT Healthcare Co, you can compare the effects of market volatilities on Union Materials and INFINITT Healthcare 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 Union Materials with a short position of INFINITT Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Materials and INFINITT Healthcare.
Diversification Opportunities for Union Materials and INFINITT Healthcare
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Union and INFINITT is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Union Materials Corp and INFINITT Healthcare Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INFINITT Healthcare and Union Materials 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 Union Materials Corp are associated (or correlated) with INFINITT Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INFINITT Healthcare has no effect on the direction of Union Materials i.e., Union Materials and INFINITT Healthcare go up and down completely randomly.
Pair Corralation between Union Materials and INFINITT Healthcare
Assuming the 90 days trading horizon Union Materials Corp is expected to generate 2.38 times more return on investment than INFINITT Healthcare. However, Union Materials is 2.38 times more volatile than INFINITT Healthcare Co. It trades about 0.13 of its potential returns per unit of risk. INFINITT Healthcare Co is currently generating about 0.28 per unit of risk. If you would invest 215,500 in Union Materials Corp on October 28, 2024 and sell it today you would earn a total of 12,000 from holding Union Materials Corp or generate 5.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Union Materials Corp vs. INFINITT Healthcare Co
Performance |
| Timeline |
| Union Materials Corp |
| INFINITT Healthcare |
Union Materials and INFINITT Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Materials and INFINITT Healthcare
The main advantage of trading using opposite Union Materials and INFINITT Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Materials position performs unexpectedly, INFINITT Healthcare 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 INFINITT Healthcare will offset losses from the drop in INFINITT Healthcare's long position.| Union Materials vs. Samsung Electronics Co | Union Materials vs. Samsung Electronics Co | Union Materials vs. KB Financial Group | Union Materials vs. Shinhan Financial Group |
| INFINITT Healthcare vs. SungMoon Electronics Co | INFINITT Healthcare vs. Korea Electronic Certification | INFINITT Healthcare vs. UJU Electronics Co | INFINITT Healthcare vs. Anam Electronics 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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