Correlation Between U Ming and Loop Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both U Ming and Loop Telecommunicatio 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 Loop Telecommunicatio 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 Loop Telecommunication International, you can compare the effects of market volatilities on U Ming and Loop Telecommunicatio 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 Loop Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Ming and Loop Telecommunicatio.
Diversification Opportunities for U Ming and Loop Telecommunicatio
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 2606 and Loop is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding U Ming Marine Transport and Loop Telecommunication Interna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loop Telecommunication 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 Loop Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loop Telecommunication has no effect on the direction of U Ming i.e., U Ming and Loop Telecommunicatio go up and down completely randomly.
Pair Corralation between U Ming and Loop Telecommunicatio
Assuming the 90 days trading horizon U Ming Marine Transport is expected to generate 0.68 times more return on investment than Loop Telecommunicatio. However, U Ming Marine Transport is 1.48 times less risky than Loop Telecommunicatio. It trades about 0.05 of its potential returns per unit of risk. Loop Telecommunication International is currently generating about 0.02 per unit of risk. If you would invest 5,270 in U Ming Marine Transport on September 3, 2024 and sell it today you would earn a total of 690.00 from holding U Ming Marine Transport or generate 13.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
U Ming Marine Transport vs. Loop Telecommunication Interna
Performance |
| Timeline |
| U Ming Marine |
| Loop Telecommunication |
U Ming and Loop Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Ming and Loop Telecommunicatio
The main advantage of trading using opposite U Ming and Loop Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Ming position performs unexpectedly, Loop Telecommunicatio 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 Loop Telecommunicatio will offset losses from the drop in Loop Telecommunicatio's long position.| U Ming vs. Universal Microelectronics Co | U Ming vs. AVerMedia Technologies | U Ming vs. Symtek Automation Asia | U Ming vs. WiseChip Semiconductor |
| Loop Telecommunicatio vs. Taiwan Semiconductor Manufacturing | Loop Telecommunicatio vs. Yang Ming Marine | Loop Telecommunicatio vs. ASE Industrial Holding | Loop Telecommunicatio 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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