Correlation Between United Radiant and Chung Fu
Can any of the company-specific risk be diversified away by investing in both United Radiant and Chung Fu 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 Radiant and Chung Fu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Radiant Technology and Chung Fu Tex International, you can compare the effects of market volatilities on United Radiant and Chung Fu 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 Radiant with a short position of Chung Fu. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Radiant and Chung Fu.
Diversification Opportunities for United Radiant and Chung Fu
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Chung is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding United Radiant Technology and Chung Fu Tex International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chung Fu Tex and United Radiant 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 Radiant Technology are associated (or correlated) with Chung Fu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chung Fu Tex has no effect on the direction of United Radiant i.e., United Radiant and Chung Fu go up and down completely randomly.
Pair Corralation between United Radiant and Chung Fu
Assuming the 90 days trading horizon United Radiant Technology is expected to generate 0.73 times more return on investment than Chung Fu. However, United Radiant Technology is 1.36 times less risky than Chung Fu. It trades about 0.23 of its potential returns per unit of risk. Chung Fu Tex International is currently generating about -0.15 per unit of risk. If you would invest 1,960 in United Radiant Technology on November 28, 2024 and sell it today you would earn a total of 100.00 from holding United Radiant Technology or generate 5.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Radiant Technology vs. Chung Fu Tex International
Performance |
| Timeline |
| United Radiant Technology |
| Chung Fu Tex |
United Radiant and Chung Fu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Radiant and Chung Fu
The main advantage of trading using opposite United Radiant and Chung Fu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Radiant position performs unexpectedly, Chung Fu 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 Chung Fu will offset losses from the drop in Chung Fu's long position.| United Radiant vs. Chicony Power Technology | United Radiant vs. Genovate Biotechnology Co | United Radiant vs. ANJI Technology Co | United Radiant vs. Apacer Technology |
| Chung Fu vs. Xxentria Technology Materials | Chung Fu vs. Asmedia Technology | Chung Fu vs. Microelectronics Technology | Chung Fu vs. General Plastic Industrial |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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