Correlation Between U Media and Macroblock
Can any of the company-specific risk be diversified away by investing in both U Media and Macroblock 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 Macroblock 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 Macroblock, you can compare the effects of market volatilities on U Media and Macroblock 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 Macroblock. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Media and Macroblock.
Diversification Opportunities for U Media and Macroblock
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between 6470 and Macroblock is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding U Media Communications and Macroblock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macroblock 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 Macroblock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macroblock has no effect on the direction of U Media i.e., U Media and Macroblock go up and down completely randomly.
Pair Corralation between U Media and Macroblock
Assuming the 90 days trading horizon U Media Communications is expected to generate 1.19 times more return on investment than Macroblock. However, U Media is 1.19 times more volatile than Macroblock. It trades about 0.0 of its potential returns per unit of risk. Macroblock is currently generating about -0.03 per unit of risk. If you would invest 6,140 in U Media Communications on December 4, 2024 and sell it today you would lose (750.00) from holding U Media Communications or give up 12.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
U Media Communications vs. Macroblock
Performance |
| Timeline |
| U Media Communications |
| Macroblock |
U Media and Macroblock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Media and Macroblock
The main advantage of trading using opposite U Media and Macroblock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Media position performs unexpectedly, Macroblock 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 Macroblock will offset losses from the drop in Macroblock's long position.| U Media vs. Holtek Semiconductor | U Media vs. Sinopower Semiconductor | U Media vs. Mospec Semiconductor Corp | U Media vs. HIM International Music |
| Macroblock vs. Hi Lai Foods Co | Macroblock vs. Chernan Metal Industrial | Macroblock vs. Tsang Yow Industrial | Macroblock vs. Unique Optical 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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