Correlation Between Dimension Computer and U Media
Can any of the company-specific risk be diversified away by investing in both Dimension Computer 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 Dimension Computer and U Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dimension Computer Technology and U Media Communications, you can compare the effects of market volatilities on Dimension Computer 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 Dimension Computer with a short position of U Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimension Computer and U Media.
Diversification Opportunities for Dimension Computer and U Media
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dimension and 6470 is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Dimension Computer Technology 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 Dimension Computer 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 Dimension Computer Technology 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 Dimension Computer i.e., Dimension Computer and U Media go up and down completely randomly.
Pair Corralation between Dimension Computer and U Media
Assuming the 90 days trading horizon Dimension Computer Technology is expected to generate 1.02 times more return on investment than U Media. However, Dimension Computer is 1.02 times more volatile than U Media Communications. It trades about 0.1 of its potential returns per unit of risk. U Media Communications is currently generating about 0.04 per unit of risk. If you would invest 2,530 in Dimension Computer Technology on September 13, 2024 and sell it today you would earn a total of 300.00 from holding Dimension Computer Technology or generate 11.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dimension Computer Technology vs. U Media Communications
Performance |
| Timeline |
| Dimension Computer |
| U Media Communications |
Dimension Computer and U Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dimension Computer and U Media
The main advantage of trading using opposite Dimension Computer and U Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dimension Computer 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.| Dimension Computer vs. RiTdisplay Corp | Dimension Computer vs. Eastern Media International | Dimension Computer vs. Newretail Co | Dimension Computer vs. Ching Feng Home |
| U Media vs. Hunya Foods Co | U Media vs. Cleanaway Co | U Media vs. Fu Burg Industrial | U Media vs. Coxon Precise 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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