Correlation Between U Media and Gold Rain
Can any of the company-specific risk be diversified away by investing in both U Media and Gold Rain 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 Gold Rain 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 Gold Rain Enterprises, you can compare the effects of market volatilities on U Media and Gold Rain 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 Gold Rain. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Media and Gold Rain.
Diversification Opportunities for U Media and Gold Rain
Average diversification
The 3 months correlation between 6470 and Gold is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding U Media Communications and Gold Rain Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Rain Enterprises 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 Gold Rain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Rain Enterprises has no effect on the direction of U Media i.e., U Media and Gold Rain go up and down completely randomly.
Pair Corralation between U Media and Gold Rain
Assuming the 90 days trading horizon U Media Communications is expected to under-perform the Gold Rain. But the stock apears to be less risky and, when comparing its historical volatility, U Media Communications is 1.62 times less risky than Gold Rain. The stock trades about -0.1 of its potential returns per unit of risk. The Gold Rain Enterprises is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5,430 in Gold Rain Enterprises on October 14, 2024 and sell it today you would earn a total of 130.00 from holding Gold Rain Enterprises or generate 2.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
U Media Communications vs. Gold Rain Enterprises
Performance |
| Timeline |
| U Media Communications |
| Gold Rain Enterprises |
U Media and Gold Rain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Media and Gold Rain
The main advantage of trading using opposite U Media and Gold Rain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Media position performs unexpectedly, Gold Rain 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 Gold Rain will offset losses from the drop in Gold Rain'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, |
| Gold Rain vs. Cameo Communications | Gold Rain vs. U Media Communications | Gold Rain vs. Quanta Computer | Gold Rain vs. Kworld Computer Co |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |