Correlation Between U Ming and Ardentec
Can any of the company-specific risk be diversified away by investing in both U Ming and Ardentec 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 Ardentec 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 Ardentec, you can compare the effects of market volatilities on U Ming and Ardentec 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 Ardentec. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Ming and Ardentec.
Diversification Opportunities for U Ming and Ardentec
Good diversification
The 3 months correlation between 2606 and Ardentec is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding U Ming Marine Transport and Ardentec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ardentec 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 Ardentec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ardentec has no effect on the direction of U Ming i.e., U Ming and Ardentec go up and down completely randomly.
Pair Corralation between U Ming and Ardentec
Assuming the 90 days trading horizon U Ming Marine Transport is expected to under-perform the Ardentec. But the stock apears to be less risky and, when comparing its historical volatility, U Ming Marine Transport is 1.65 times less risky than Ardentec. The stock trades about -0.05 of its potential returns per unit of risk. The Ardentec is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 5,210 in Ardentec on October 29, 2024 and sell it today you would earn a total of 1,680 from holding Ardentec or generate 32.25% 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. Ardentec
Performance |
| Timeline |
| U Ming Marine |
| Ardentec |
U Ming and Ardentec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Ming and Ardentec
The main advantage of trading using opposite U Ming and Ardentec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Ming position performs unexpectedly, Ardentec 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 Ardentec will offset losses from the drop in Ardentec's long position.| U Ming vs. Chang Type Industrial | U Ming vs. Anderson Industrial Corp | U Ming vs. Klingon Aerospace | U Ming vs. Basso Industry Corp |
| Ardentec vs. Sino American Silicon Products | Ardentec vs. Powertech Technology | Ardentec vs. Formosa Sumco Technology | Ardentec vs. Radiant Opto Electronics 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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