Correlation Between Cytogen and Union Materials
Can any of the company-specific risk be diversified away by investing in both Cytogen and Union Materials 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 Cytogen and Union Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cytogen and Union Materials Corp, you can compare the effects of market volatilities on Cytogen and Union Materials 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 Cytogen with a short position of Union Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cytogen and Union Materials.
Diversification Opportunities for Cytogen and Union Materials
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cytogen and Union is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Cytogen and Union Materials Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Materials Corp and Cytogen 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 Cytogen are associated (or correlated) with Union Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Materials Corp has no effect on the direction of Cytogen i.e., Cytogen and Union Materials go up and down completely randomly.
Pair Corralation between Cytogen and Union Materials
Assuming the 90 days trading horizon Cytogen is expected to under-perform the Union Materials. In addition to that, Cytogen is 3.52 times more volatile than Union Materials Corp. It trades about -0.05 of its total potential returns per unit of risk. Union Materials Corp is currently generating about 0.14 per unit of volatility. If you would invest 229,500 in Union Materials Corp on October 12, 2024 and sell it today you would earn a total of 12,000 from holding Union Materials Corp or generate 5.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cytogen vs. Union Materials Corp
Performance |
| Timeline |
| Cytogen |
| Union Materials Corp |
Cytogen and Union Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cytogen and Union Materials
The main advantage of trading using opposite Cytogen and Union Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cytogen position performs unexpectedly, Union Materials 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 Union Materials will offset losses from the drop in Union Materials' long position.| Cytogen vs. Kukdo Chemical Co | Cytogen vs. Kg Chemical | Cytogen vs. Nable Communications | Cytogen vs. Youngchang Chemical Co |
| Union Materials vs. AptaBio Therapeutics | Union Materials vs. Cytogen | Union Materials vs. Woori Technology Investment | Union Materials vs. ABL Bio |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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