Correlation Between Uni President and Addcn Technology
Can any of the company-specific risk be diversified away by investing in both Uni President and Addcn Technology 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 Addcn Technology 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 Addcn Technology Co, you can compare the effects of market volatilities on Uni President and Addcn Technology 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 Addcn Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uni President and Addcn Technology.
Diversification Opportunities for Uni President and Addcn Technology
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Uni and Addcn is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Uni President Enterprises Corp and Addcn Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addcn Technology 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 Addcn Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addcn Technology has no effect on the direction of Uni President i.e., Uni President and Addcn Technology go up and down completely randomly.
Pair Corralation between Uni President and Addcn Technology
Assuming the 90 days trading horizon Uni President Enterprises Corp is expected to generate 0.84 times more return on investment than Addcn Technology. However, Uni President Enterprises Corp is 1.2 times less risky than Addcn Technology. It trades about 0.07 of its potential returns per unit of risk. Addcn Technology Co is currently generating about 0.01 per unit of risk. If you would invest 7,000 in Uni President Enterprises Corp on September 4, 2024 and sell it today you would earn a total of 1,560 from holding Uni President Enterprises Corp or generate 22.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Uni President Enterprises Corp vs. Addcn Technology Co
Performance |
| Timeline |
| Uni President Enterp |
| Addcn Technology |
Uni President and Addcn Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uni President and Addcn Technology
The main advantage of trading using opposite Uni President and Addcn Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uni President position performs unexpectedly, Addcn Technology 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 Addcn Technology will offset losses from the drop in Addcn Technology's long position.| Uni President vs. President Chain Store | Uni President vs. Formosa Plastics Corp | Uni President vs. Nan Ya Plastics | Uni President vs. Taiwan Cement Corp |
| Addcn Technology vs. President Chain Store | Addcn Technology vs. Uni President Enterprises Corp | Addcn Technology vs. Taiwan FamilyMart Co | Addcn Technology vs. Eclat Textile 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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