Correlation Between Union Materials and Mobileleader CoLtd
Can any of the company-specific risk be diversified away by investing in both Union Materials and Mobileleader CoLtd 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 Mobileleader CoLtd 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 Mobileleader CoLtd, you can compare the effects of market volatilities on Union Materials and Mobileleader CoLtd 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 Mobileleader CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Materials and Mobileleader CoLtd.
Diversification Opportunities for Union Materials and Mobileleader CoLtd
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Union and Mobileleader is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Union Materials Corp and Mobileleader CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobileleader CoLtd 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 Mobileleader CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobileleader CoLtd has no effect on the direction of Union Materials i.e., Union Materials and Mobileleader CoLtd go up and down completely randomly.
Pair Corralation between Union Materials and Mobileleader CoLtd
Assuming the 90 days trading horizon Union Materials Corp is expected to generate 0.93 times more return on investment than Mobileleader CoLtd. However, Union Materials Corp is 1.07 times less risky than Mobileleader CoLtd. It trades about 0.18 of its potential returns per unit of risk. Mobileleader CoLtd is currently generating about -0.07 per unit of risk. If you would invest 226,500 in Union Materials Corp on October 13, 2024 and sell it today you would earn a total of 15,500 from holding Union Materials Corp or generate 6.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Union Materials Corp vs. Mobileleader CoLtd
Performance |
| Timeline |
| Union Materials Corp |
| Mobileleader CoLtd |
Union Materials and Mobileleader CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Materials and Mobileleader CoLtd
The main advantage of trading using opposite Union Materials and Mobileleader CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Materials position performs unexpectedly, Mobileleader CoLtd 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 Mobileleader CoLtd will offset losses from the drop in Mobileleader CoLtd's long position.| Union Materials vs. AptaBio Therapeutics | Union Materials vs. Cytogen | Union Materials vs. Woori Technology Investment | Union Materials vs. ABL Bio |
| Mobileleader CoLtd vs. Union Materials Corp | Mobileleader CoLtd vs. Alton Sports CoLtd | Mobileleader CoLtd vs. LS Materials | Mobileleader CoLtd vs. DB Financial 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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