Correlation Between U Media and Universal Vision
Can any of the company-specific risk be diversified away by investing in both U Media and Universal Vision 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 Universal Vision 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 Universal Vision Biotechnology, you can compare the effects of market volatilities on U Media and Universal Vision 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 Universal Vision. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Media and Universal Vision.
Diversification Opportunities for U Media and Universal Vision
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between 6470 and Universal is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding U Media Communications and Universal Vision Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Vision Bio 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 Universal Vision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Vision Bio has no effect on the direction of U Media i.e., U Media and Universal Vision go up and down completely randomly.
Pair Corralation between U Media and Universal Vision
Assuming the 90 days trading horizon U Media Communications is expected to generate 1.55 times more return on investment than Universal Vision. However, U Media is 1.55 times more volatile than Universal Vision Biotechnology. It trades about -0.11 of its potential returns per unit of risk. Universal Vision Biotechnology is currently generating about -0.17 per unit of risk. If you would invest 5,290 in U Media Communications on October 13, 2024 and sell it today you would lose (260.00) from holding U Media Communications or give up 4.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
U Media Communications vs. Universal Vision Biotechnology
Performance |
| Timeline |
| U Media Communications |
| Universal Vision Bio |
U Media and Universal Vision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Media and Universal Vision
The main advantage of trading using opposite U Media and Universal Vision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Media position performs unexpectedly, Universal Vision 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 Universal Vision will offset losses from the drop in Universal Vision's long position.| U Media vs. China Metal Products | U Media vs. De Licacy Industrial | U Media vs. Allied Industrial | U Media vs. SuperAlloy Industrial Co, |
| Universal Vision vs. Unitech Computer Co | Universal Vision vs. Jetwell Computer Co | Universal Vision vs. U Media Communications | Universal Vision vs. Tehmag Foods |
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 Stocks Directory module to find actively traded stocks across global markets.
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