Correlation Between United Integrated and Century Wind
Can any of the company-specific risk be diversified away by investing in both United Integrated and Century Wind 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 United Integrated and Century Wind into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Integrated Services and Century Wind Power, you can compare the effects of market volatilities on United Integrated and Century Wind 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 United Integrated with a short position of Century Wind. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Integrated and Century Wind.
Diversification Opportunities for United Integrated and Century Wind
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and Century is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding United Integrated Services and Century Wind Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Wind Power and United Integrated 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 United Integrated Services are associated (or correlated) with Century Wind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Wind Power has no effect on the direction of United Integrated i.e., United Integrated and Century Wind go up and down completely randomly.
Pair Corralation between United Integrated and Century Wind
Assuming the 90 days trading horizon United Integrated Services is expected to generate 1.94 times more return on investment than Century Wind. However, United Integrated is 1.94 times more volatile than Century Wind Power. It trades about 0.3 of its potential returns per unit of risk. Century Wind Power is currently generating about -0.21 per unit of risk. If you would invest 31,900 in United Integrated Services on August 30, 2024 and sell it today you would earn a total of 9,100 from holding United Integrated Services or generate 28.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Integrated Services vs. Century Wind Power
Performance |
| Timeline |
| United Integrated |
| Century Wind Power |
United Integrated and Century Wind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Integrated and Century Wind
The main advantage of trading using opposite United Integrated and Century Wind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Integrated position performs unexpectedly, Century Wind 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 Century Wind will offset losses from the drop in Century Wind's long position.| United Integrated vs. Yulon Motor Co | United Integrated vs. Far Eastern Department | United Integrated vs. China Steel Corp | United Integrated vs. Chang Hwa Commercial |
| Century Wind vs. Ruentex Development Co | Century Wind vs. United Integrated Services | Century Wind vs. CTCI Corp | Century Wind vs. Ruentex Engineering Construction |
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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