Correlation Between United Orthopedic and Grand Plastic
Can any of the company-specific risk be diversified away by investing in both United Orthopedic and Grand Plastic 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 United Orthopedic and Grand Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Orthopedic and Grand Plastic Technology, you can compare the effects of market volatilities on United Orthopedic and Grand Plastic 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 United Orthopedic with a short position of Grand Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Orthopedic and Grand Plastic.
Diversification Opportunities for United Orthopedic and Grand Plastic
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between United and Grand is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding United Orthopedic and Grand Plastic Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Plastic Technology and United Orthopedic 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 United Orthopedic are associated (or correlated) with Grand Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Plastic Technology has no effect on the direction of United Orthopedic i.e., United Orthopedic and Grand Plastic go up and down completely randomly.
Pair Corralation between United Orthopedic and Grand Plastic
Assuming the 90 days trading horizon United Orthopedic is expected to generate 2.0 times less return on investment than Grand Plastic. But when comparing it to its historical volatility, United Orthopedic is 1.56 times less risky than Grand Plastic. It trades about 0.1 of its potential returns per unit of risk. Grand Plastic Technology is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 23,801 in Grand Plastic Technology on August 26, 2024 and sell it today you would earn a total of 144,699 from holding Grand Plastic Technology or generate 607.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Orthopedic vs. Grand Plastic Technology
Performance |
| Timeline |
| United Orthopedic |
| Grand Plastic Technology |
United Orthopedic and Grand Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Orthopedic and Grand Plastic
The main advantage of trading using opposite United Orthopedic and Grand Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Orthopedic position performs unexpectedly, Grand Plastic 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 Grand Plastic will offset losses from the drop in Grand Plastic's long position.| United Orthopedic vs. Grand Plastic Technology | United Orthopedic vs. Dadi Early Childhood Education | United Orthopedic vs. Eternal Materials Co | United Orthopedic vs. Ibase Gaming |
| Grand Plastic vs. Para Light Electronics | Grand Plastic vs. ANJI Technology Co | Grand Plastic vs. Aiptek International | Grand Plastic vs. General Interface Solution |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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