Correlation Between Grand Ocean and United Radiant
Can any of the company-specific risk be diversified away by investing in both Grand Ocean and United Radiant 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 Grand Ocean and United Radiant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grand Ocean Retail and United Radiant Technology, you can compare the effects of market volatilities on Grand Ocean and United Radiant 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 Grand Ocean with a short position of United Radiant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Ocean and United Radiant.
Diversification Opportunities for Grand Ocean and United Radiant
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grand and United is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Grand Ocean Retail and United Radiant Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Radiant Technology and Grand Ocean 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 Grand Ocean Retail are associated (or correlated) with United Radiant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Radiant Technology has no effect on the direction of Grand Ocean i.e., Grand Ocean and United Radiant go up and down completely randomly.
Pair Corralation between Grand Ocean and United Radiant
Assuming the 90 days trading horizon Grand Ocean Retail is expected to under-perform the United Radiant. In addition to that, Grand Ocean is 1.18 times more volatile than United Radiant Technology. It trades about -0.26 of its total potential returns per unit of risk. United Radiant Technology is currently generating about 0.06 per unit of volatility. If you would invest 2,170 in United Radiant Technology on August 24, 2024 and sell it today you would earn a total of 80.00 from holding United Radiant Technology or generate 3.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Ocean Retail vs. United Radiant Technology
Performance |
| Timeline |
| Grand Ocean Retail |
| United Radiant Technology |
Grand Ocean and United Radiant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Ocean and United Radiant
The main advantage of trading using opposite Grand Ocean and United Radiant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Ocean position performs unexpectedly, United Radiant 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 United Radiant will offset losses from the drop in United Radiant's long position.| Grand Ocean vs. Taiwan Semiconductor Manufacturing | Grand Ocean vs. Hon Hai Precision | Grand Ocean vs. MediaTek | Grand Ocean vs. Chunghwa Telecom Co |
| United Radiant vs. Advantech Co | United Radiant vs. IEI Integration Corp | United Radiant vs. Flytech Technology Co | United Radiant vs. ADLINK Technology |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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