Correlation Between Ambassador Hotel and U Ming
Can any of the company-specific risk be diversified away by investing in both Ambassador Hotel and U Ming 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 Ambassador Hotel and U Ming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ambassador Hotel and U Ming Marine Transport, you can compare the effects of market volatilities on Ambassador Hotel and U Ming 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 Ambassador Hotel with a short position of U Ming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambassador Hotel and U Ming.
Diversification Opportunities for Ambassador Hotel and U Ming
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ambassador and 2606 is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Ambassador Hotel and U Ming Marine Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U Ming Marine and Ambassador Hotel 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 Ambassador Hotel are associated (or correlated) with U Ming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U Ming Marine has no effect on the direction of Ambassador Hotel i.e., Ambassador Hotel and U Ming go up and down completely randomly.
Pair Corralation between Ambassador Hotel and U Ming
Assuming the 90 days trading horizon Ambassador Hotel is expected to generate 6.63 times less return on investment than U Ming. In addition to that, Ambassador Hotel is 2.08 times more volatile than U Ming Marine Transport. It trades about 0.03 of its total potential returns per unit of risk. U Ming Marine Transport is currently generating about 0.43 per unit of volatility. If you would invest 5,520 in U Ming Marine Transport on August 27, 2024 and sell it today you would earn a total of 590.00 from holding U Ming Marine Transport or generate 10.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ambassador Hotel vs. U Ming Marine Transport
Performance |
| Timeline |
| Ambassador Hotel |
| U Ming Marine |
Ambassador Hotel and U Ming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ambassador Hotel and U Ming
The main advantage of trading using opposite Ambassador Hotel and U Ming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambassador Hotel position performs unexpectedly, U Ming 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 U Ming will offset losses from the drop in U Ming's long position.| Ambassador Hotel vs. Taiwan Semiconductor Manufacturing | Ambassador Hotel vs. Hon Hai Precision | Ambassador Hotel vs. MediaTek | Ambassador Hotel vs. Chunghwa Telecom Co |
| U Ming vs. Sunny Friend Environmental | U Ming vs. TTET Union Corp | U Ming vs. ECOVE Environment Corp | U Ming vs. Yulon Finance Corp |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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