Correlation Between U Ming and Weltrend Semiconductor
Can any of the company-specific risk be diversified away by investing in both U Ming and Weltrend Semiconductor 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 Weltrend Semiconductor 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 Weltrend Semiconductor, you can compare the effects of market volatilities on U Ming and Weltrend Semiconductor 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 Weltrend Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Ming and Weltrend Semiconductor.
Diversification Opportunities for U Ming and Weltrend Semiconductor
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 2606 and Weltrend is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding U Ming Marine Transport and Weltrend Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weltrend Semiconductor 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 Weltrend Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weltrend Semiconductor has no effect on the direction of U Ming i.e., U Ming and Weltrend Semiconductor go up and down completely randomly.
Pair Corralation between U Ming and Weltrend Semiconductor
Assuming the 90 days trading horizon U Ming Marine Transport is expected to generate 0.75 times more return on investment than Weltrend Semiconductor. However, U Ming Marine Transport is 1.34 times less risky than Weltrend Semiconductor. It trades about -0.06 of its potential returns per unit of risk. Weltrend Semiconductor is currently generating about -0.34 per unit of risk. If you would invest 5,840 in U Ming Marine Transport on October 7, 2024 and sell it today you would lose (130.00) from holding U Ming Marine Transport or give up 2.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
U Ming Marine Transport vs. Weltrend Semiconductor
Performance |
| Timeline |
| U Ming Marine |
| Weltrend Semiconductor |
U Ming and Weltrend Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Ming and Weltrend Semiconductor
The main advantage of trading using opposite U Ming and Weltrend Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Ming position performs unexpectedly, Weltrend Semiconductor 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 Weltrend Semiconductor will offset losses from the drop in Weltrend Semiconductor's long position.| U Ming vs. Hota Industrial Mfg | U Ming vs. Sinbon Electronics Co | U Ming vs. Tong Hsing Electronic | U Ming vs. Flexium Interconnect |
| Weltrend Semiconductor vs. Holy Stone Enterprise | Weltrend Semiconductor vs. Walsin Technology Corp | Weltrend Semiconductor vs. Yageo Corp | Weltrend Semiconductor vs. HannStar Board 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 CEOs Directory module to screen CEOs from public companies around the world.
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