Correlation Between Thermaltake Technology and U Media
Can any of the company-specific risk be diversified away by investing in both Thermaltake Technology 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 Thermaltake Technology and U Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thermaltake Technology Co and U Media Communications, you can compare the effects of market volatilities on Thermaltake Technology 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 Thermaltake Technology with a short position of U Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thermaltake Technology and U Media.
Diversification Opportunities for Thermaltake Technology and U Media
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Thermaltake and 6470 is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Thermaltake Technology Co 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 Thermaltake Technology 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 Thermaltake Technology Co 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 Thermaltake Technology i.e., Thermaltake Technology and U Media go up and down completely randomly.
Pair Corralation between Thermaltake Technology and U Media
Assuming the 90 days trading horizon Thermaltake Technology Co is expected to generate 1.47 times more return on investment than U Media. However, Thermaltake Technology is 1.47 times more volatile than U Media Communications. It trades about -0.02 of its potential returns per unit of risk. U Media Communications is currently generating about -0.03 per unit of risk. If you would invest 5,387 in Thermaltake Technology Co on September 1, 2024 and sell it today you would lose (1,707) from holding Thermaltake Technology Co or give up 31.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thermaltake Technology Co vs. U Media Communications
Performance |
| Timeline |
| Thermaltake Technology |
| U Media Communications |
Thermaltake Technology and U Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thermaltake Technology and U Media
The main advantage of trading using opposite Thermaltake Technology and U Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thermaltake Technology 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.| Thermaltake Technology vs. ASRock Inc | Thermaltake Technology vs. Auras Technology Co | Thermaltake Technology vs. Micro Star International Co | Thermaltake Technology vs. Gigabyte Technology Co |
| U Media vs. Accton Technology Corp | U Media vs. HTC Corp | U Media vs. Wistron NeWeb Corp | U Media vs. Arcadyan Technology 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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