Correlation Between Hurum and UJU Electronics
Can any of the company-specific risk be diversified away by investing in both Hurum and UJU Electronics 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 Hurum and UJU Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hurum Co and UJU Electronics Co, you can compare the effects of market volatilities on Hurum and UJU Electronics 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 Hurum with a short position of UJU Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hurum and UJU Electronics.
Diversification Opportunities for Hurum and UJU Electronics
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hurum and UJU is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Hurum Co and UJU Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UJU Electronics and Hurum 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 Hurum Co are associated (or correlated) with UJU Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UJU Electronics has no effect on the direction of Hurum i.e., Hurum and UJU Electronics go up and down completely randomly.
Pair Corralation between Hurum and UJU Electronics
Assuming the 90 days trading horizon Hurum Co is expected to under-perform the UJU Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Hurum Co is 1.08 times less risky than UJU Electronics. The stock trades about -0.19 of its potential returns per unit of risk. The UJU Electronics Co is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 1,595,000 in UJU Electronics Co on September 2, 2024 and sell it today you would lose (302,000) from holding UJU Electronics Co or give up 18.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hurum Co vs. UJU Electronics Co
Performance |
| Timeline |
| Hurum |
| UJU Electronics |
Hurum and UJU Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hurum and UJU Electronics
The main advantage of trading using opposite Hurum and UJU Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hurum position performs unexpectedly, UJU Electronics 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 UJU Electronics will offset losses from the drop in UJU Electronics' long position.| Hurum vs. Samsung Electronics Co | Hurum vs. Samsung Electronics Co | Hurum vs. LG Energy Solution | Hurum vs. SK Hynix |
| UJU Electronics vs. Dongsin Engineering Construction | UJU Electronics vs. Doosan Fuel Cell | UJU Electronics vs. Daishin Balance 1 | UJU Electronics vs. Total Soft Bank |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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