Correlation Between Huang Hsiang and U Media
Can any of the company-specific risk be diversified away by investing in both Huang Hsiang 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 Huang Hsiang and U Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huang Hsiang Construction and U Media Communications, you can compare the effects of market volatilities on Huang Hsiang 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 Huang Hsiang with a short position of U Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huang Hsiang and U Media.
Diversification Opportunities for Huang Hsiang and U Media
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Huang and 6470 is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Huang Hsiang Construction 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 Huang Hsiang 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 Huang Hsiang Construction 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 Huang Hsiang i.e., Huang Hsiang and U Media go up and down completely randomly.
Pair Corralation between Huang Hsiang and U Media
Assuming the 90 days trading horizon Huang Hsiang Construction is expected to generate 0.99 times more return on investment than U Media. However, Huang Hsiang Construction is 1.01 times less risky than U Media. It trades about 0.06 of its potential returns per unit of risk. U Media Communications is currently generating about 0.03 per unit of risk. If you would invest 4,025 in Huang Hsiang Construction on September 12, 2024 and sell it today you would earn a total of 2,575 from holding Huang Hsiang Construction or generate 63.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huang Hsiang Construction vs. U Media Communications
Performance |
| Timeline |
| Huang Hsiang Construction |
| U Media Communications |
Huang Hsiang and U Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huang Hsiang and U Media
The main advantage of trading using opposite Huang Hsiang and U Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huang Hsiang 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.| Huang Hsiang vs. Chong Hong Construction | Huang Hsiang vs. Ruentex Development Co | Huang Hsiang vs. Symtek Automation Asia | Huang Hsiang vs. WiseChip Semiconductor |
| U Media vs. Gemtek Technology Co | U Media vs. Ruentex Development Co | U Media vs. WiseChip Semiconductor | U Media vs. Novatek Microelectronics 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Stocks Directory Find actively traded stocks across global markets | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |