Correlation Between AzureWave Technologies and U Media
Can any of the company-specific risk be diversified away by investing in both AzureWave Technologies 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 AzureWave Technologies and U Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AzureWave Technologies and U Media Communications, you can compare the effects of market volatilities on AzureWave Technologies 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 AzureWave Technologies with a short position of U Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of AzureWave Technologies and U Media.
Diversification Opportunities for AzureWave Technologies and U Media
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AzureWave and 6470 is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding AzureWave 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 AzureWave Technologies 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 AzureWave 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 AzureWave Technologies i.e., AzureWave Technologies and U Media go up and down completely randomly.
Pair Corralation between AzureWave Technologies and U Media
Assuming the 90 days trading horizon AzureWave Technologies is expected to generate 1.62 times more return on investment than U Media. However, AzureWave Technologies is 1.62 times more volatile than U Media Communications. It trades about 0.14 of its potential returns per unit of risk. U Media Communications is currently generating about -0.11 per unit of risk. If you would invest 5,550 in AzureWave Technologies on October 7, 2024 and sell it today you would earn a total of 700.00 from holding AzureWave Technologies or generate 12.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AzureWave Technologies vs. U Media Communications
Performance |
| Timeline |
| AzureWave Technologies |
| U Media Communications |
AzureWave Technologies and U Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AzureWave Technologies and U Media
The main advantage of trading using opposite AzureWave Technologies and U Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AzureWave Technologies 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.| AzureWave Technologies vs. Holy Stone Enterprise | AzureWave Technologies vs. Walsin Technology Corp | AzureWave Technologies vs. Yageo Corp | AzureWave Technologies vs. HannStar Board Corp |
| 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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