Correlation Between Uni President and Taiwan FamilyMart
Can any of the company-specific risk be diversified away by investing in both Uni President and Taiwan FamilyMart 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 Taiwan FamilyMart 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 Taiwan FamilyMart Co, you can compare the effects of market volatilities on Uni President and Taiwan FamilyMart 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 Taiwan FamilyMart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uni President and Taiwan FamilyMart.
Diversification Opportunities for Uni President and Taiwan FamilyMart
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Uni and Taiwan is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Uni President Enterprises Corp and Taiwan FamilyMart Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan FamilyMart 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 Taiwan FamilyMart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan FamilyMart has no effect on the direction of Uni President i.e., Uni President and Taiwan FamilyMart go up and down completely randomly.
Pair Corralation between Uni President and Taiwan FamilyMart
Assuming the 90 days trading horizon Uni President Enterprises Corp is expected to generate 1.92 times more return on investment than Taiwan FamilyMart. However, Uni President is 1.92 times more volatile than Taiwan FamilyMart Co. It trades about 0.05 of its potential returns per unit of risk. Taiwan FamilyMart Co is currently generating about -0.02 per unit of risk. If you would invest 7,206 in Uni President Enterprises Corp on August 31, 2024 and sell it today you would earn a total of 1,244 from holding Uni President Enterprises Corp or generate 17.26% 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. Taiwan FamilyMart Co
Performance |
| Timeline |
| Uni President Enterp |
| Taiwan FamilyMart |
Uni President and Taiwan FamilyMart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uni President and Taiwan FamilyMart
The main advantage of trading using opposite Uni President and Taiwan FamilyMart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uni President position performs unexpectedly, Taiwan FamilyMart 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 Taiwan FamilyMart will offset losses from the drop in Taiwan FamilyMart'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 |
| Taiwan FamilyMart vs. President Chain Store | Taiwan FamilyMart vs. Uni President Enterprises Corp | Taiwan FamilyMart vs. Poya International Co | Taiwan FamilyMart vs. Hotai Motor 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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