Correlation Between Hi Lai and U Ming
Can any of the company-specific risk be diversified away by investing in both Hi Lai and U Ming 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 Hi Lai and U Ming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hi Lai Foods Co and U Ming Marine Transport, you can compare the effects of market volatilities on Hi Lai and U Ming 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 Hi Lai with a short position of U Ming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hi Lai and U Ming.
Diversification Opportunities for Hi Lai and U Ming
Very good diversification
The 3 months correlation between 1268 and 2606 is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Hi Lai Foods Co and U Ming Marine Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U Ming Marine and Hi Lai 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 Hi Lai Foods Co are associated (or correlated) with U Ming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U Ming Marine has no effect on the direction of Hi Lai i.e., Hi Lai and U Ming go up and down completely randomly.
Pair Corralation between Hi Lai and U Ming
Assuming the 90 days trading horizon Hi Lai is expected to generate 7.23 times less return on investment than U Ming. But when comparing it to its historical volatility, Hi Lai Foods Co is 2.65 times less risky than U Ming. It trades about 0.08 of its potential returns per unit of risk. U Ming Marine Transport is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 5,380 in U Ming Marine Transport on October 22, 2024 and sell it today you would earn a total of 540.00 from holding U Ming Marine Transport or generate 10.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hi Lai Foods Co vs. U Ming Marine Transport
Performance |
| Timeline |
| Hi Lai Foods |
| U Ming Marine |
Hi Lai and U Ming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hi Lai and U Ming
The main advantage of trading using opposite Hi Lai and U Ming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hi Lai position performs unexpectedly, U Ming 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 U Ming will offset losses from the drop in U Ming's long position.| Hi Lai vs. Union Insurance Co | Hi Lai vs. Chailease Holding Co | Hi Lai vs. Newretail Co | Hi Lai vs. Mercuries Life Insurance |
| U Ming vs. Sincere Navigation Corp | U Ming vs. Wan Hai Lines | U Ming vs. Yang Ming Marine | U Ming vs. Formosa Chemicals Fibre |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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