Correlation Between Emerging Display and U Media
Can any of the company-specific risk be diversified away by investing in both Emerging Display and U Media 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 Emerging Display and U Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerging Display Technologies and U Media Communications, you can compare the effects of market volatilities on Emerging Display and U Media 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 Emerging Display with a short position of U Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Display and U Media.
Diversification Opportunities for Emerging Display and U Media
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Emerging and 6470 is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Emerging Display Technologies and U Media Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U Media Communications and Emerging Display 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 Emerging Display Technologies are associated (or correlated) with U Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U Media Communications has no effect on the direction of Emerging Display i.e., Emerging Display and U Media go up and down completely randomly.
Pair Corralation between Emerging Display and U Media
Assuming the 90 days trading horizon Emerging Display Technologies is expected to under-perform the U Media. But the stock apears to be less risky and, when comparing its historical volatility, Emerging Display Technologies is 1.21 times less risky than U Media. The stock trades about -0.08 of its potential returns per unit of risk. The U Media Communications is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 5,720 in U Media Communications on September 3, 2024 and sell it today you would lose (580.00) from holding U Media Communications or give up 10.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerging Display Technologies vs. U Media Communications
Performance |
| Timeline |
| Emerging Display Tec |
| U Media Communications |
Emerging Display and U Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerging Display and U Media
The main advantage of trading using opposite Emerging Display and U Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Display position performs unexpectedly, U Media 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 Media will offset losses from the drop in U Media's long position.| Emerging Display vs. Taiwan Semiconductor Manufacturing | Emerging Display vs. Yang Ming Marine | Emerging Display vs. ASE Industrial Holding | Emerging Display vs. AU Optronics |
| U Media vs. Accton Technology Corp | U Media vs. Wistron NeWeb Corp | U Media vs. Alpha Networks | U Media vs. Gemtek Technology Co |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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