Correlation Between U Ming and Level Biotechnology
Can any of the company-specific risk be diversified away by investing in both U Ming and Level Biotechnology 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 Level Biotechnology 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 Level Biotechnology, you can compare the effects of market volatilities on U Ming and Level Biotechnology 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 Level Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Ming and Level Biotechnology.
Diversification Opportunities for U Ming and Level Biotechnology
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 2606 and Level is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding U Ming Marine Transport and Level Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Level Biotechnology 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 Level Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Level Biotechnology has no effect on the direction of U Ming i.e., U Ming and Level Biotechnology go up and down completely randomly.
Pair Corralation between U Ming and Level Biotechnology
Assuming the 90 days trading horizon U Ming Marine Transport is expected to under-perform the Level Biotechnology. In addition to that, U Ming is 1.9 times more volatile than Level Biotechnology. It trades about -0.06 of its total potential returns per unit of risk. Level Biotechnology is currently generating about -0.04 per unit of volatility. If you would invest 3,250 in Level Biotechnology on September 12, 2024 and sell it today you would lose (20.00) from holding Level Biotechnology or give up 0.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
U Ming Marine Transport vs. Level Biotechnology
Performance |
| Timeline |
| U Ming Marine |
| Level Biotechnology |
U Ming and Level Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Ming and Level Biotechnology
The main advantage of trading using opposite U Ming and Level Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Ming position performs unexpectedly, Level Biotechnology 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 Level Biotechnology will offset losses from the drop in Level Biotechnology'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 |
| Level Biotechnology vs. Ruentex Development Co | Level Biotechnology vs. Symtek Automation Asia | Level Biotechnology vs. WiseChip Semiconductor | Level Biotechnology 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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