Correlation Between U Ming and EirGenix
Can any of the company-specific risk be diversified away by investing in both U Ming and EirGenix 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 EirGenix 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 EirGenix, you can compare the effects of market volatilities on U Ming and EirGenix 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 EirGenix. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Ming and EirGenix.
Diversification Opportunities for U Ming and EirGenix
Very weak diversification
The 3 months correlation between 2606 and EirGenix is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding U Ming Marine Transport and EirGenix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EirGenix 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 EirGenix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EirGenix has no effect on the direction of U Ming i.e., U Ming and EirGenix go up and down completely randomly.
Pair Corralation between U Ming and EirGenix
Assuming the 90 days trading horizon U Ming Marine Transport is expected to generate 1.1 times more return on investment than EirGenix. However, U Ming is 1.1 times more volatile than EirGenix. It trades about 0.04 of its potential returns per unit of risk. EirGenix is currently generating about -0.04 per unit of risk. If you would invest 4,585 in U Ming Marine Transport on August 29, 2024 and sell it today you would earn a total of 1,375 from holding U Ming Marine Transport or generate 29.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
U Ming Marine Transport vs. EirGenix
Performance |
| Timeline |
| U Ming Marine |
| EirGenix |
U Ming and EirGenix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Ming and EirGenix
The main advantage of trading using opposite U Ming and EirGenix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Ming position performs unexpectedly, EirGenix 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 EirGenix will offset losses from the drop in EirGenix'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 |
| EirGenix vs. Elan Microelectronics Corp | EirGenix vs. Oceanic Beverages Co | EirGenix vs. Ambassador Hotel | EirGenix vs. Chung Lien Transportation |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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