Correlation Between Basso Industry and U Ming
Can any of the company-specific risk be diversified away by investing in both Basso Industry 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 Basso Industry and U Ming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Basso Industry Corp and U Ming Marine Transport, you can compare the effects of market volatilities on Basso Industry 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 Basso Industry with a short position of U Ming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basso Industry and U Ming.
Diversification Opportunities for Basso Industry and U Ming
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Basso and 2606 is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Basso Industry Corp 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 Basso Industry 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 Basso Industry Corp 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 Basso Industry i.e., Basso Industry and U Ming go up and down completely randomly.
Pair Corralation between Basso Industry and U Ming
Assuming the 90 days trading horizon Basso Industry is expected to generate 19.42 times less return on investment than U Ming. But when comparing it to its historical volatility, Basso Industry Corp is 2.07 times less risky than U Ming. It trades about 0.0 of its potential returns per unit of risk. U Ming Marine Transport is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 5,190 in U Ming Marine Transport on October 30, 2024 and sell it today you would earn a total of 560.00 from holding U Ming Marine Transport or generate 10.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Basso Industry Corp vs. U Ming Marine Transport
Performance |
| Timeline |
| Basso Industry Corp |
| U Ming Marine |
Basso Industry and U Ming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Basso Industry and U Ming
The main advantage of trading using opposite Basso Industry and U Ming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basso Industry 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.| Basso Industry vs. Cheng Shin Rubber | Basso Industry vs. Kung Long Batteries | Basso Industry vs. Pou Chen Corp | Basso Industry vs. China Steel Chemical |
| 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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