Correlation Between Aedas Homes and UET United
Can any of the company-specific risk be diversified away by investing in both Aedas Homes and UET United 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 Aedas Homes and UET United into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aedas Homes SA and UET United Electronic, you can compare the effects of market volatilities on Aedas Homes and UET United 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 Aedas Homes with a short position of UET United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aedas Homes and UET United.
Diversification Opportunities for Aedas Homes and UET United
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aedas and UET is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Aedas Homes SA and UET United Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UET United Electronic and Aedas Homes 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 Aedas Homes SA are associated (or correlated) with UET United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UET United Electronic has no effect on the direction of Aedas Homes i.e., Aedas Homes and UET United go up and down completely randomly.
Pair Corralation between Aedas Homes and UET United
Assuming the 90 days horizon Aedas Homes SA is expected to generate 0.4 times more return on investment than UET United. However, Aedas Homes SA is 2.52 times less risky than UET United. It trades about 0.11 of its potential returns per unit of risk. UET United Electronic is currently generating about 0.03 per unit of risk. If you would invest 965.00 in Aedas Homes SA on September 18, 2024 and sell it today you would earn a total of 1,515 from holding Aedas Homes SA or generate 156.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aedas Homes SA vs. UET United Electronic
Performance |
| Timeline |
| Aedas Homes SA |
| UET United Electronic |
Aedas Homes and UET United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aedas Homes and UET United
The main advantage of trading using opposite Aedas Homes and UET United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aedas Homes position performs unexpectedly, UET United 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 UET United will offset losses from the drop in UET United's long position.| Aedas Homes vs. Lennar | Aedas Homes vs. Sekisui Chemical Co | Aedas Homes vs. Superior Plus Corp | Aedas Homes vs. SIVERS SEMICONDUCTORS AB |
| UET United vs. Cisco Systems | UET United vs. Nokia | UET United vs. Superior Plus Corp | UET United vs. SIVERS SEMICONDUCTORS AB |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |