Correlation Between U Media and Cowealth Medical
Can any of the company-specific risk be diversified away by investing in both U Media and Cowealth Medical 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 Cowealth Medical 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 Cowealth Medical Holding, you can compare the effects of market volatilities on U Media and Cowealth Medical 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 Cowealth Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Media and Cowealth Medical.
Diversification Opportunities for U Media and Cowealth Medical
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between 6470 and Cowealth is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding U Media Communications and Cowealth Medical Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cowealth Medical Holding 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 Cowealth Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cowealth Medical Holding has no effect on the direction of U Media i.e., U Media and Cowealth Medical go up and down completely randomly.
Pair Corralation between U Media and Cowealth Medical
Assuming the 90 days trading horizon U Media Communications is expected to generate 2.1 times more return on investment than Cowealth Medical. However, U Media is 2.1 times more volatile than Cowealth Medical Holding. It trades about 0.01 of its potential returns per unit of risk. Cowealth Medical Holding is currently generating about -0.02 per unit of risk. If you would invest 5,254 in U Media Communications on October 13, 2024 and sell it today you would lose (224.00) from holding U Media Communications or give up 4.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
U Media Communications vs. Cowealth Medical Holding
Performance |
| Timeline |
| U Media Communications |
| Cowealth Medical Holding |
U Media and Cowealth Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Media and Cowealth Medical
The main advantage of trading using opposite U Media and Cowealth Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Media position performs unexpectedly, Cowealth Medical 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 Cowealth Medical will offset losses from the drop in Cowealth Medical'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, |
| Cowealth Medical vs. U Media Communications | Cowealth Medical vs. Cameo Communications | Cowealth Medical vs. Chia Yi Steel | Cowealth Medical vs. Syscom Computer Engineering |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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