Correlation Between U Ming and Chainqui Construction
Can any of the company-specific risk be diversified away by investing in both U Ming and Chainqui Construction 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 Chainqui Construction 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 Chainqui Construction Development, you can compare the effects of market volatilities on U Ming and Chainqui Construction 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 Chainqui Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Ming and Chainqui Construction.
Diversification Opportunities for U Ming and Chainqui Construction
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 2606 and Chainqui is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding U Ming Marine Transport and Chainqui Construction Developm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chainqui Construction 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 Chainqui Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chainqui Construction has no effect on the direction of U Ming i.e., U Ming and Chainqui Construction go up and down completely randomly.
Pair Corralation between U Ming and Chainqui Construction
Assuming the 90 days trading horizon U Ming Marine Transport is expected to generate 1.21 times more return on investment than Chainqui Construction. However, U Ming is 1.21 times more volatile than Chainqui Construction Development. It trades about 0.02 of its potential returns per unit of risk. Chainqui Construction Development is currently generating about 0.03 per unit of risk. If you would invest 5,010 in U Ming Marine Transport on September 13, 2024 and sell it today you would earn a total of 700.00 from holding U Ming Marine Transport or generate 13.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
U Ming Marine Transport vs. Chainqui Construction Developm
Performance |
| Timeline |
| U Ming Marine |
| Chainqui Construction |
U Ming and Chainqui Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Ming and Chainqui Construction
The main advantage of trading using opposite U Ming and Chainqui Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Ming position performs unexpectedly, Chainqui Construction 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 Chainqui Construction will offset losses from the drop in Chainqui Construction's long position.| U Ming vs. Yang Ming Marine | U Ming vs. Wan Hai Lines | U Ming vs. Taiwan Navigation Co | U Ming vs. China Airlines |
| Chainqui Construction vs. Yang Ming Marine | Chainqui Construction vs. Wan Hai Lines | Chainqui Construction vs. U Ming Marine Transport | Chainqui Construction vs. Taiwan Navigation 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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