Correlation Between Uni President and Hey Song
Can any of the company-specific risk be diversified away by investing in both Uni President and Hey Song 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 Uni President and Hey Song into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uni President Enterprises Corp and Hey Song Corp, you can compare the effects of market volatilities on Uni President and Hey Song 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 Uni President with a short position of Hey Song. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uni President and Hey Song.
Diversification Opportunities for Uni President and Hey Song
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Uni and Hey is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Uni President Enterprises Corp and Hey Song Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hey Song Corp and Uni President 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 Uni President Enterprises Corp are associated (or correlated) with Hey Song. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hey Song Corp has no effect on the direction of Uni President i.e., Uni President and Hey Song go up and down completely randomly.
Pair Corralation between Uni President and Hey Song
Assuming the 90 days trading horizon Uni President Enterprises Corp is expected to under-perform the Hey Song. In addition to that, Uni President is 2.39 times more volatile than Hey Song Corp. It trades about -0.12 of its total potential returns per unit of risk. Hey Song Corp is currently generating about 0.05 per unit of volatility. If you would invest 4,150 in Hey Song Corp on August 30, 2024 and sell it today you would earn a total of 20.00 from holding Hey Song Corp or generate 0.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Uni President Enterprises Corp vs. Hey Song Corp
Performance |
| Timeline |
| Uni President Enterp |
| Hey Song Corp |
Uni President and Hey Song Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uni President and Hey Song
The main advantage of trading using opposite Uni President and Hey Song positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uni President position performs unexpectedly, Hey Song 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 Hey Song will offset losses from the drop in Hey Song's long position.The idea behind Uni President Enterprises Corp and Hey Song Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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