Correlation Between U Media and Ingentec
Can any of the company-specific risk be diversified away by investing in both U Media and Ingentec 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 Ingentec 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 Ingentec, you can compare the effects of market volatilities on U Media and Ingentec 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 Ingentec. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Media and Ingentec.
Diversification Opportunities for U Media and Ingentec
Good diversification
The 3 months correlation between 6470 and Ingentec is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding U Media Communications and Ingentec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingentec 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 Ingentec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingentec has no effect on the direction of U Media i.e., U Media and Ingentec go up and down completely randomly.
Pair Corralation between U Media and Ingentec
Assuming the 90 days trading horizon U Media Communications is expected to generate 1.32 times more return on investment than Ingentec. However, U Media is 1.32 times more volatile than Ingentec. It trades about 0.04 of its potential returns per unit of risk. Ingentec is currently generating about -0.23 per unit of risk. If you would invest 5,230 in U Media Communications on September 13, 2024 and sell it today you would earn a total of 160.00 from holding U Media Communications or generate 3.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.73% |
| Values | Daily Returns |
U Media Communications vs. Ingentec
Performance |
| Timeline |
| U Media Communications |
| Ingentec |
U Media and Ingentec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Media and Ingentec
The main advantage of trading using opposite U Media and Ingentec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Media position performs unexpectedly, Ingentec 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 Ingentec will offset losses from the drop in Ingentec's long position.| U Media vs. Hunya Foods Co | U Media vs. Cleanaway Co | U Media vs. Fu Burg Industrial | U Media vs. Coxon Precise Industrial |
| Ingentec vs. Medigen Biotechnology | Ingentec vs. Feng Hsin Steel | Ingentec vs. Century Iron And | Ingentec vs. Yieh United Steel |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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