Correlation Between U Ming and Shanghai Commercial
Can any of the company-specific risk be diversified away by investing in both U Ming and Shanghai Commercial 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 Shanghai Commercial 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 Shanghai Commercial Savings, you can compare the effects of market volatilities on U Ming and Shanghai Commercial 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 Shanghai Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Ming and Shanghai Commercial.
Diversification Opportunities for U Ming and Shanghai Commercial
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between 2606 and Shanghai is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding U Ming Marine Transport and Shanghai Commercial Savings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Commercial 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 Shanghai Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Commercial has no effect on the direction of U Ming i.e., U Ming and Shanghai Commercial go up and down completely randomly.
Pair Corralation between U Ming and Shanghai Commercial
Assuming the 90 days trading horizon U Ming Marine Transport is expected to generate 1.51 times more return on investment than Shanghai Commercial. However, U Ming is 1.51 times more volatile than Shanghai Commercial Savings. It trades about 0.02 of its potential returns per unit of risk. Shanghai Commercial Savings is currently generating about -0.1 per unit of risk. If you would invest 5,880 in U Ming Marine Transport on August 29, 2024 and sell it today you would earn a total of 80.00 from holding U Ming Marine Transport or generate 1.36% 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. Shanghai Commercial Savings
Performance |
| Timeline |
| U Ming Marine |
| Shanghai Commercial |
U Ming and Shanghai Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Ming and Shanghai Commercial
The main advantage of trading using opposite U Ming and Shanghai Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Ming position performs unexpectedly, Shanghai Commercial 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 Shanghai Commercial will offset losses from the drop in Shanghai Commercial'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 |
| Shanghai Commercial vs. Taiwan Secom Co | Shanghai Commercial vs. TTET Union Corp | Shanghai Commercial vs. China Steel Chemical | Shanghai Commercial vs. Taiwan Shin Kong |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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