Correlation Between U Ming and International CSRC
Can any of the company-specific risk be diversified away by investing in both U Ming and International CSRC 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 U Ming and International CSRC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between U Ming Marine Transport and International CSRC Investment, you can compare the effects of market volatilities on U Ming and International CSRC 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 U Ming with a short position of International CSRC. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Ming and International CSRC.
Diversification Opportunities for U Ming and International CSRC
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between 2606 and International is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding U Ming Marine Transport and International CSRC Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International CSRC and U Ming 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 U Ming Marine Transport are associated (or correlated) with International CSRC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International CSRC has no effect on the direction of U Ming i.e., U Ming and International CSRC go up and down completely randomly.
Pair Corralation between U Ming and International CSRC
Assuming the 90 days trading horizon U Ming Marine Transport is expected to generate 1.55 times more return on investment than International CSRC. However, U Ming is 1.55 times more volatile than International CSRC Investment. It trades about 0.02 of its potential returns per unit of risk. International CSRC Investment is currently generating about -0.09 per unit of risk. If you would invest 5,880 in U Ming Marine Transport on August 29, 2024 and sell it today you would earn a total of 80.00 from holding U Ming Marine Transport or generate 1.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
U Ming Marine Transport vs. International CSRC Investment
Performance |
| Timeline |
| U Ming Marine |
| International CSRC |
U Ming and International CSRC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Ming and International CSRC
The main advantage of trading using opposite U Ming and International CSRC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Ming position performs unexpectedly, International CSRC 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 International CSRC will offset losses from the drop in International CSRC's long position.| U Ming vs. Sincere Navigation Corp | U Ming vs. Wan Hai Lines | U Ming vs. Yang Ming Marine | U Ming vs. Formosa Chemicals Fibre |
| International CSRC vs. Cheng Shin Rubber | International CSRC vs. TSRC Corp | International CSRC vs. Taiwan Cement Corp | International CSRC vs. China Steel Chemical |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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