Correlation Between X Legend and U Media
Can any of the company-specific risk be diversified away by investing in both X Legend 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 X Legend and U Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between X Legend Entertainment Co and U Media Communications, you can compare the effects of market volatilities on X Legend 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 X Legend with a short position of U Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of X Legend and U Media.
Diversification Opportunities for X Legend and U Media
Significant diversification
The 3 months correlation between 4994 and 6470 is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding X Legend Entertainment 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 X Legend 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 X Legend Entertainment 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 X Legend i.e., X Legend and U Media go up and down completely randomly.
Pair Corralation between X Legend and U Media
Assuming the 90 days trading horizon X Legend Entertainment Co is expected to under-perform the U Media. But the stock apears to be less risky and, when comparing its historical volatility, X Legend Entertainment Co is 1.07 times less risky than U Media. The stock trades about -0.05 of its potential returns per unit of risk. The U Media Communications is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 5,750 in U Media Communications on August 25, 2024 and sell it today you would lose (755.00) from holding U Media Communications or give up 13.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
X Legend Entertainment Co vs. U Media Communications
Performance |
| Timeline |
| X Legend Entertainment |
| U Media Communications |
X Legend and U Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X Legend and U Media
The main advantage of trading using opposite X Legend and U Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X Legend 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.| X Legend vs. Abnova Taiwan Corp | X Legend vs. Cheng Mei Materials | X Legend vs. BizLink Holding | X Legend vs. Lemtech Holdings Co |
| U Media vs. Accton Technology Corp | U Media vs. Arcadyan Technology Corp | U Media vs. Advanced Ceramic X | 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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