Correlation Between Uni President and Yulon Nissan
Can any of the company-specific risk be diversified away by investing in both Uni President and Yulon Nissan 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 Yulon Nissan 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 Yulon Nissan Motor, you can compare the effects of market volatilities on Uni President and Yulon Nissan 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 Yulon Nissan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uni President and Yulon Nissan.
Diversification Opportunities for Uni President and Yulon Nissan
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Uni and Yulon is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Uni President Enterprises Corp and Yulon Nissan Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yulon Nissan Motor 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 Yulon Nissan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yulon Nissan Motor has no effect on the direction of Uni President i.e., Uni President and Yulon Nissan go up and down completely randomly.
Pair Corralation between Uni President and Yulon Nissan
Assuming the 90 days trading horizon Uni President Enterprises Corp is expected to generate 0.66 times more return on investment than Yulon Nissan. However, Uni President Enterprises Corp is 1.52 times less risky than Yulon Nissan. It trades about 0.05 of its potential returns per unit of risk. Yulon Nissan Motor is currently generating about -0.14 per unit of risk. If you would invest 7,650 in Uni President Enterprises Corp on September 27, 2024 and sell it today you would earn a total of 730.00 from holding Uni President Enterprises Corp or generate 9.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.41% |
| Values | Daily Returns |
Uni President Enterprises Corp vs. Yulon Nissan Motor
Performance |
| Timeline |
| Uni President Enterp |
| Yulon Nissan Motor |
Uni President and Yulon Nissan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uni President and Yulon Nissan
The main advantage of trading using opposite Uni President and Yulon Nissan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uni President position performs unexpectedly, Yulon Nissan 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 Yulon Nissan will offset losses from the drop in Yulon Nissan's long position.| Uni President vs. Taisun Enterprise Co | Uni President vs. De Licacy Industrial | Uni President vs. Wisher Industrial Co | Uni President vs. Tainan Enterprises Co |
| Yulon Nissan vs. Merida Industry Co | Yulon Nissan vs. Cheng Shin Rubber | Yulon Nissan vs. Uni President Enterprises Corp | Yulon Nissan vs. Pou Chen Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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