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
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 2606 and Univacco is 0.34. 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 0.95 times more return on investment than Univacco Technology. However, U Ming Marine Transport is 1.05 times less risky than Univacco Technology. It trades about 0.03 of its potential returns per unit of risk. Univacco Technology is currently generating about -0.03 per unit of risk. If you would invest 5,710 in U Ming Marine Transport on November 4, 2024 and sell it today you would earn a total of 40.00 from holding U Ming Marine Transport or generate 0.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
U Ming Marine Transport vs. Univacco Technology
Performance |
| Timeline |
| U Ming Marine |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Univacco Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
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.The idea behind U Ming Marine Transport and Univacco Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |