Correlation Between Anderson Industrial and U Ming
Can any of the company-specific risk be diversified away by investing in both Anderson Industrial 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 Anderson Industrial and U Ming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anderson Industrial Corp and U Ming Marine Transport, you can compare the effects of market volatilities on Anderson Industrial 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 Anderson Industrial with a short position of U Ming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anderson Industrial and U Ming.
Diversification Opportunities for Anderson Industrial and U Ming
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Anderson and 2606 is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Anderson Industrial 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 Anderson Industrial 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 Anderson Industrial 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 Anderson Industrial i.e., Anderson Industrial and U Ming go up and down completely randomly.
Pair Corralation between Anderson Industrial and U Ming
Assuming the 90 days trading horizon Anderson Industrial Corp is expected to generate 1.29 times more return on investment than U Ming. However, Anderson Industrial is 1.29 times more volatile than U Ming Marine Transport. It trades about 0.04 of its potential returns per unit of risk. U Ming Marine Transport is currently generating about 0.02 per unit of risk. If you would invest 1,010 in Anderson Industrial Corp on October 30, 2024 and sell it today you would earn a total of 360.00 from holding Anderson Industrial Corp or generate 35.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anderson Industrial Corp vs. U Ming Marine Transport
Performance |
| Timeline |
| Anderson Industrial Corp |
| U Ming Marine |
Anderson Industrial and U Ming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anderson Industrial and U Ming
The main advantage of trading using opposite Anderson Industrial and U Ming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anderson Industrial 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.| Anderson Industrial vs. Awea Mechantronic Co | Anderson Industrial vs. Lee Chi Enterprises | Anderson Industrial vs. Kaulin Mfg | Anderson Industrial vs. Gordon Auto Body |
| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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