Correlation Between Hota Industrial and U Ming
Can any of the company-specific risk be diversified away by investing in both Hota 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 Hota 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 Hota Industrial Mfg and U Ming Marine Transport, you can compare the effects of market volatilities on Hota 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 Hota Industrial with a short position of U Ming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hota Industrial and U Ming.
Diversification Opportunities for Hota Industrial and U Ming
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hota and 2606 is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Hota Industrial Mfg 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 Hota 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 Hota Industrial Mfg 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 Hota Industrial i.e., Hota Industrial and U Ming go up and down completely randomly.
Pair Corralation between Hota Industrial and U Ming
Assuming the 90 days trading horizon Hota Industrial Mfg is expected to generate 1.83 times more return on investment than U Ming. However, Hota Industrial is 1.83 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 0.05 per unit of risk. If you would invest 5,730 in Hota Industrial Mfg on October 24, 2024 and sell it today you would earn a total of 260.00 from holding Hota Industrial Mfg or generate 4.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hota Industrial Mfg vs. U Ming Marine Transport
Performance |
| Timeline |
| Hota Industrial Mfg |
| U Ming Marine |
Hota Industrial and U Ming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hota Industrial and U Ming
The main advantage of trading using opposite Hota Industrial and U Ming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hota 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.| Hota Industrial vs. BizLink Holding | Hota Industrial vs. Delta Electronics | Hota Industrial vs. Eclat Textile Co | Hota Industrial vs. Chroma ATE |
| 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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