Correlation Between U Media and Tehmag Foods
Can any of the company-specific risk be diversified away by investing in both U Media and Tehmag Foods 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 U Media and Tehmag Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between U Media Communications and Tehmag Foods, you can compare the effects of market volatilities on U Media and Tehmag Foods 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 U Media with a short position of Tehmag Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Media and Tehmag Foods.
Diversification Opportunities for U Media and Tehmag Foods
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between 6470 and Tehmag is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding U Media Communications and Tehmag Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tehmag Foods and U Media 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 U Media Communications are associated (or correlated) with Tehmag Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tehmag Foods has no effect on the direction of U Media i.e., U Media and Tehmag Foods go up and down completely randomly.
Pair Corralation between U Media and Tehmag Foods
Assuming the 90 days trading horizon U Media Communications is expected to generate 4.64 times more return on investment than Tehmag Foods. However, U Media is 4.64 times more volatile than Tehmag Foods. It trades about 0.01 of its potential returns per unit of risk. Tehmag Foods is currently generating about -0.22 per unit of risk. If you would invest 5,220 in U Media Communications on August 29, 2024 and sell it today you would lose (10.00) from holding U Media Communications or give up 0.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.62% |
| Values | Daily Returns |
U Media Communications vs. Tehmag Foods
Performance |
| Timeline |
| U Media Communications |
| Tehmag Foods |
U Media and Tehmag Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Media and Tehmag Foods
The main advantage of trading using opposite U Media and Tehmag Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Media position performs unexpectedly, Tehmag Foods 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 Tehmag Foods will offset losses from the drop in Tehmag Foods' long position.| U Media vs. Mechema Chemicals Int | U Media vs. Grand Pacific Petrochemical | U Media vs. Taita Chemical Co | U Media vs. Phoenix Silicon International |
| Tehmag Foods vs. AVerMedia Technologies | Tehmag Foods vs. U Media Communications | Tehmag Foods vs. Mercuries Life Insurance | Tehmag Foods vs. MediaTek |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Positions Ratings 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 |