Correlation Between Chung Hung and U Media
Can any of the company-specific risk be diversified away by investing in both Chung Hung 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 Chung Hung and U Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chung Hung Steel and U Media Communications, you can compare the effects of market volatilities on Chung Hung 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 Chung Hung with a short position of U Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chung Hung and U Media.
Diversification Opportunities for Chung Hung and U Media
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chung and 6470 is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Chung Hung Steel 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 Chung Hung 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 Chung Hung Steel 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 Chung Hung i.e., Chung Hung and U Media go up and down completely randomly.
Pair Corralation between Chung Hung and U Media
Assuming the 90 days trading horizon Chung Hung Steel is expected to generate 1.04 times more return on investment than U Media. However, Chung Hung is 1.04 times more volatile than U Media Communications. It trades about -0.04 of its potential returns per unit of risk. U Media Communications is currently generating about -0.04 per unit of risk. If you would invest 2,255 in Chung Hung Steel on September 1, 2024 and sell it today you would lose (285.00) from holding Chung Hung Steel or give up 12.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chung Hung Steel vs. U Media Communications
Performance |
| Timeline |
| Chung Hung Steel |
| U Media Communications |
Chung Hung and U Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chung Hung and U Media
The main advantage of trading using opposite Chung Hung and U Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chung Hung 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.| Chung Hung vs. China Steel Corp | Chung Hung vs. Yieh Phui Enterprise | Chung Hung vs. Ta Chen Stainless | Chung Hung vs. Yang Ming Marine |
| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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