Correlation Between Uniform Industrial and Min Aik
Can any of the company-specific risk be diversified away by investing in both Uniform Industrial and Min Aik 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 Uniform Industrial and Min Aik into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uniform Industrial Corp and Min Aik Technology, you can compare the effects of market volatilities on Uniform Industrial and Min Aik 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 Uniform Industrial with a short position of Min Aik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uniform Industrial and Min Aik.
Diversification Opportunities for Uniform Industrial and Min Aik
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Uniform and Min is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Uniform Industrial Corp and Min Aik Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Min Aik Technology and Uniform Industrial 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 Uniform Industrial Corp are associated (or correlated) with Min Aik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Min Aik Technology has no effect on the direction of Uniform Industrial i.e., Uniform Industrial and Min Aik go up and down completely randomly.
Pair Corralation between Uniform Industrial and Min Aik
Assuming the 90 days trading horizon Uniform Industrial Corp is expected to generate 0.66 times more return on investment than Min Aik. However, Uniform Industrial Corp is 1.51 times less risky than Min Aik. It trades about -0.22 of its potential returns per unit of risk. Min Aik Technology is currently generating about -0.25 per unit of risk. If you would invest 2,975 in Uniform Industrial Corp on September 4, 2024 and sell it today you would lose (245.00) from holding Uniform Industrial Corp or give up 8.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Uniform Industrial Corp vs. Min Aik Technology
Performance |
| Timeline |
| Uniform Industrial Corp |
| Min Aik Technology |
Uniform Industrial and Min Aik Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uniform Industrial and Min Aik
The main advantage of trading using opposite Uniform Industrial and Min Aik positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uniform Industrial position performs unexpectedly, Min Aik 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 Min Aik will offset losses from the drop in Min Aik's long position.| Uniform Industrial vs. Taiwan Semiconductor Manufacturing | Uniform Industrial vs. Yang Ming Marine | Uniform Industrial vs. ASE Industrial Holding | Uniform Industrial vs. AU Optronics |
| Min Aik vs. Taiwan Semiconductor Manufacturing | Min Aik vs. Yang Ming Marine | Min Aik vs. ASE Industrial Holding | Min Aik vs. AU Optronics |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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