Correlation Between U Media and Camellia Metal
Can any of the company-specific risk be diversified away by investing in both U Media and Camellia Metal 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 Camellia Metal 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 Camellia Metal Co, you can compare the effects of market volatilities on U Media and Camellia Metal 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 Camellia Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Media and Camellia Metal.
Diversification Opportunities for U Media and Camellia Metal
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 6470 and Camellia is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding U Media Communications and Camellia Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camellia Metal 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 Camellia Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camellia Metal has no effect on the direction of U Media i.e., U Media and Camellia Metal go up and down completely randomly.
Pair Corralation between U Media and Camellia Metal
Assuming the 90 days trading horizon U Media Communications is expected to under-perform the Camellia Metal. In addition to that, U Media is 1.24 times more volatile than Camellia Metal Co. It trades about -0.04 of its total potential returns per unit of risk. Camellia Metal Co is currently generating about -0.01 per unit of volatility. If you would invest 1,605 in Camellia Metal Co on September 14, 2024 and sell it today you would lose (95.00) from holding Camellia Metal Co or give up 5.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
U Media Communications vs. Camellia Metal Co
Performance |
| Timeline |
| U Media Communications |
| Camellia Metal |
U Media and Camellia Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Media and Camellia Metal
The main advantage of trading using opposite U Media and Camellia Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Media position performs unexpectedly, Camellia Metal 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 Camellia Metal will offset losses from the drop in Camellia Metal's long position.| U Media vs. Gemtek Technology Co | U Media vs. Ruentex Development Co | U Media vs. WiseChip Semiconductor | U Media vs. Novatek Microelectronics Corp |
| Camellia Metal vs. Trade Van Information Services | Camellia Metal vs. U Media Communications | Camellia Metal vs. Gamania Digital Entertainment | Camellia Metal vs. C Media Electronics |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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