Correlation Between Union Materials and Foodnamoo
Can any of the company-specific risk be diversified away by investing in both Union Materials and Foodnamoo 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 Foodnamoo 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 Foodnamoo, you can compare the effects of market volatilities on Union Materials and Foodnamoo 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 Foodnamoo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Materials and Foodnamoo.
Diversification Opportunities for Union Materials and Foodnamoo
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Union and Foodnamoo is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Union Materials Corp and Foodnamoo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foodnamoo 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 Foodnamoo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foodnamoo has no effect on the direction of Union Materials i.e., Union Materials and Foodnamoo go up and down completely randomly.
Pair Corralation between Union Materials and Foodnamoo
Assuming the 90 days trading horizon Union Materials Corp is expected to generate 0.78 times more return on investment than Foodnamoo. However, Union Materials Corp is 1.28 times less risky than Foodnamoo. It trades about 0.23 of its potential returns per unit of risk. Foodnamoo is currently generating about -0.09 per unit of risk. If you would invest 218,500 in Union Materials Corp on October 11, 2024 and sell it today you would earn a total of 23,000 from holding Union Materials Corp or generate 10.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Union Materials Corp vs. Foodnamoo
Performance |
| Timeline |
| Union Materials Corp |
| Foodnamoo |
Union Materials and Foodnamoo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Materials and Foodnamoo
The main advantage of trading using opposite Union Materials and Foodnamoo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Materials position performs unexpectedly, Foodnamoo 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 Foodnamoo will offset losses from the drop in Foodnamoo's long position.| Union Materials vs. AptaBio Therapeutics | Union Materials vs. Cytogen | Union Materials vs. Woori Technology Investment | Union Materials vs. ABL Bio |
| Foodnamoo vs. Samyang Foods Co | Foodnamoo vs. Union Materials Corp | Foodnamoo vs. Haitai Confectionery Foods | Foodnamoo vs. Top Material 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |