Correlation Between U Ming and Mechema Chemicals
Can any of the company-specific risk be diversified away by investing in both U Ming and Mechema Chemicals 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 Mechema Chemicals 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 Mechema Chemicals Int, you can compare the effects of market volatilities on U Ming and Mechema Chemicals 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 Mechema Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Ming and Mechema Chemicals.
Diversification Opportunities for U Ming and Mechema Chemicals
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between 2606 and Mechema is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding U Ming Marine Transport and Mechema Chemicals Int in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mechema Chemicals Int 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 Mechema Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mechema Chemicals Int has no effect on the direction of U Ming i.e., U Ming and Mechema Chemicals go up and down completely randomly.
Pair Corralation between U Ming and Mechema Chemicals
Assuming the 90 days trading horizon U Ming Marine Transport is expected to generate 1.67 times more return on investment than Mechema Chemicals. However, U Ming is 1.67 times more volatile than Mechema Chemicals Int. It trades about 0.13 of its potential returns per unit of risk. Mechema Chemicals Int is currently generating about -0.43 per unit of risk. If you would invest 5,380 in U Ming Marine Transport on October 24, 2024 and sell it today you would earn a total of 330.00 from holding U Ming Marine Transport or generate 6.13% 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. Mechema Chemicals Int
Performance |
| Timeline |
| U Ming Marine |
| Mechema Chemicals Int |
U Ming and Mechema Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Ming and Mechema Chemicals
The main advantage of trading using opposite U Ming and Mechema Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Ming position performs unexpectedly, Mechema Chemicals 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 Mechema Chemicals will offset losses from the drop in Mechema Chemicals' 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 |
| Mechema Chemicals vs. Coremax Corp | Mechema Chemicals vs. Taiwan Hopax Chemsistry | Mechema Chemicals vs. Delta Electronics | Mechema Chemicals vs. China Steel Chemical |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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