Correlation Between Grand Pacific and U Media
Can any of the company-specific risk be diversified away by investing in both Grand Pacific and U Media 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 Grand Pacific and U Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grand Pacific Petrochemical and U Media Communications, you can compare the effects of market volatilities on Grand Pacific and U Media 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 Grand Pacific with a short position of U Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Pacific and U Media.
Diversification Opportunities for Grand Pacific and U Media
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Grand and 6470 is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Grand Pacific Petrochemical and U Media Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U Media Communications and Grand Pacific 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 Grand Pacific Petrochemical are associated (or correlated) with U Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U Media Communications has no effect on the direction of Grand Pacific i.e., Grand Pacific and U Media go up and down completely randomly.
Pair Corralation between Grand Pacific and U Media
Assuming the 90 days trading horizon Grand Pacific Petrochemical is expected to under-perform the U Media. But the stock apears to be less risky and, when comparing its historical volatility, Grand Pacific Petrochemical is 3.1 times less risky than U Media. The stock trades about -0.05 of its potential returns per unit of risk. The U Media Communications is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 6,452 in U Media Communications on November 27, 2024 and sell it today you would lose (942.00) from holding U Media Communications or give up 14.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 93.74% |
| Values | Daily Returns |
Grand Pacific Petrochemical vs. U Media Communications
Performance |
| Timeline |
| Grand Pacific Petroc |
| U Media Communications |
Grand Pacific and U Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Pacific and U Media
The main advantage of trading using opposite Grand Pacific and U Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Pacific position performs unexpectedly, U Media 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 Media will offset losses from the drop in U Media's long position.| Grand Pacific vs. Chung Hwa Chemical | Grand Pacific vs. Oriental Union Chemical | Grand Pacific vs. Sunko Ink Co | Grand Pacific vs. Formosan Union Chemical |
| U Media vs. Accton Technology Corp | U Media vs. HTC Corp | U Media vs. Wistron NeWeb Corp | U Media vs. Arcadyan Technology 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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