Correlation Between U Ming and Univacco Technology
Can any of the company-specific risk be diversified away by investing in both U Ming and Univacco Technology 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 Univacco Technology 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 Univacco Technology, you can compare the effects of market volatilities on U Ming and Univacco Technology 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 Univacco Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Ming and Univacco Technology.
Diversification Opportunities for U Ming and Univacco Technology
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 2606 and Univacco is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding U Ming Marine Transport and Univacco Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Univacco Technology 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 Univacco Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Univacco Technology has no effect on the direction of U Ming i.e., U Ming and Univacco Technology go up and down completely randomly.
Pair Corralation between U Ming and Univacco Technology
Assuming the 90 days trading horizon U Ming Marine Transport is expected to generate 0.24 times more return on investment than Univacco Technology. However, U Ming Marine Transport is 4.16 times less risky than Univacco Technology. It trades about 0.27 of its potential returns per unit of risk. Univacco Technology is currently generating about 0.04 per unit of risk. If you would invest 5,570 in U Ming Marine Transport on September 1, 2024 and sell it today you would earn a total of 390.00 from holding U Ming Marine Transport or generate 7.0% 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. Univacco Technology
Performance |
| Timeline |
| U Ming Marine |
| Univacco Technology |
U Ming and Univacco Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Ming and Univacco Technology
The main advantage of trading using opposite U Ming and Univacco Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Ming position performs unexpectedly, Univacco Technology 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 Univacco Technology will offset losses from the drop in Univacco Technology's long position.| U Ming vs. Sincere Navigation Corp | U Ming vs. Wan Hai Lines | U Ming vs. Yang Ming Marine | U Ming vs. Formosa Chemicals Fibre |
| Univacco Technology vs. Dawushan Farm Tech | Univacco Technology vs. Simplo Technology Co | Univacco Technology vs. Alchip Technologies | Univacco Technology vs. Huang Hsiang Construction |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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