Correlation Between Unitech Computer and U Media
Can any of the company-specific risk be diversified away by investing in both Unitech Computer 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 Unitech Computer and U Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unitech Computer Co and U Media Communications, you can compare the effects of market volatilities on Unitech Computer 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 Unitech Computer with a short position of U Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unitech Computer and U Media.
Diversification Opportunities for Unitech Computer and U Media
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Unitech and 6470 is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Unitech Computer Co 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 Unitech Computer 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 Unitech Computer Co 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 Unitech Computer i.e., Unitech Computer and U Media go up and down completely randomly.
Pair Corralation between Unitech Computer and U Media
Assuming the 90 days trading horizon Unitech Computer Co is expected to generate 0.47 times more return on investment than U Media. However, Unitech Computer Co is 2.12 times less risky than U Media. It trades about 0.07 of its potential returns per unit of risk. U Media Communications is currently generating about 0.01 per unit of risk. If you would invest 2,901 in Unitech Computer Co on September 3, 2024 and sell it today you would earn a total of 929.00 from holding Unitech Computer Co or generate 32.02% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.78% |
Values | Daily Returns |
Unitech Computer Co vs. U Media Communications
Performance |
Timeline |
Unitech Computer |
U Media Communications |
Unitech Computer and U Media Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Unitech Computer and U Media
The main advantage of trading using opposite Unitech Computer and U Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unitech Computer 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.Unitech Computer vs. Taiwan Semiconductor Manufacturing | Unitech Computer vs. Yang Ming Marine | Unitech Computer vs. ASE Industrial Holding | Unitech Computer vs. AU Optronics |
U Media vs. Accton Technology Corp | U Media vs. Wistron NeWeb Corp | U Media vs. Alpha Networks | U Media vs. Gemtek Technology Co |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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