Correlation Between Castles Technology and Uniform Industrial
Can any of the company-specific risk be diversified away by investing in both Castles Technology and Uniform Industrial 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 Castles Technology and Uniform Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Castles Technology Co and Uniform Industrial Corp, you can compare the effects of market volatilities on Castles Technology and Uniform Industrial 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 Castles Technology with a short position of Uniform Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Castles Technology and Uniform Industrial.
Diversification Opportunities for Castles Technology and Uniform Industrial
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Castles and Uniform is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Castles Technology Co and Uniform Industrial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniform Industrial Corp and Castles 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 Castles Technology Co are associated (or correlated) with Uniform Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniform Industrial Corp has no effect on the direction of Castles Technology i.e., Castles Technology and Uniform Industrial go up and down completely randomly.
Pair Corralation between Castles Technology and Uniform Industrial
Assuming the 90 days trading horizon Castles Technology Co is expected to generate 0.93 times more return on investment than Uniform Industrial. However, Castles Technology Co is 1.07 times less risky than Uniform Industrial. It trades about 0.03 of its potential returns per unit of risk. Uniform Industrial Corp is currently generating about 0.0 per unit of risk. If you would invest 6,383 in Castles Technology Co on October 14, 2024 and sell it today you would earn a total of 1,707 from holding Castles Technology Co or generate 26.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Castles Technology Co vs. Uniform Industrial Corp
Performance |
| Timeline |
| Castles Technology |
| Uniform Industrial Corp |
Castles Technology and Uniform Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Castles Technology and Uniform Industrial
The main advantage of trading using opposite Castles Technology and Uniform Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Castles Technology position performs unexpectedly, Uniform Industrial 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 Uniform Industrial will offset losses from the drop in Uniform Industrial's long position.| Castles Technology vs. AVerMedia Technologies | Castles Technology vs. Min Aik Technology | Castles Technology vs. Jean Co | Castles Technology vs. Uniform Industrial Corp |
| Uniform Industrial vs. Zinwell | Uniform Industrial vs. Senao International Co | Uniform Industrial vs. AVerMedia Technologies | Uniform Industrial vs. Gigastorage 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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