Correlation Between U Ming and Grand Fortune
Can any of the company-specific risk be diversified away by investing in both U Ming and Grand Fortune 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 Grand Fortune 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 Grand Fortune Securities, you can compare the effects of market volatilities on U Ming and Grand Fortune 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 Grand Fortune. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Ming and Grand Fortune.
Diversification Opportunities for U Ming and Grand Fortune
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 2606 and Grand is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding U Ming Marine Transport and Grand Fortune Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Fortune Securities 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 Grand Fortune. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Fortune Securities has no effect on the direction of U Ming i.e., U Ming and Grand Fortune go up and down completely randomly.
Pair Corralation between U Ming and Grand Fortune
Assuming the 90 days trading horizon U Ming is expected to generate 1.11 times less return on investment than Grand Fortune. In addition to that, U Ming is 1.45 times more volatile than Grand Fortune Securities. It trades about 0.02 of its total potential returns per unit of risk. Grand Fortune Securities is currently generating about 0.04 per unit of volatility. If you would invest 980.00 in Grand Fortune Securities on October 25, 2024 and sell it today you would earn a total of 250.00 from holding Grand Fortune Securities or generate 25.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
U Ming Marine Transport vs. Grand Fortune Securities
Performance |
| Timeline |
| U Ming Marine |
| Grand Fortune Securities |
U Ming and Grand Fortune Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Ming and Grand Fortune
The main advantage of trading using opposite U Ming and Grand Fortune positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Ming position performs unexpectedly, Grand Fortune 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 Grand Fortune will offset losses from the drop in Grand Fortune'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 |
| Grand Fortune vs. Chialin Precision Industrial | Grand Fortune vs. China Mobile | Grand Fortune vs. Loop Telecommunication International | Grand Fortune vs. Wah Hong Industrial |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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