Correlation Between U Media and Tainet Communication
Can any of the company-specific risk be diversified away by investing in both U Media and Tainet Communication 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 Tainet Communication 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 Tainet Communication System, you can compare the effects of market volatilities on U Media and Tainet Communication 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 Tainet Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Media and Tainet Communication.
Diversification Opportunities for U Media and Tainet Communication
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 6470 and Tainet is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding U Media Communications and Tainet Communication System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tainet Communication 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 Tainet Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tainet Communication has no effect on the direction of U Media i.e., U Media and Tainet Communication go up and down completely randomly.
Pair Corralation between U Media and Tainet Communication
Assuming the 90 days trading horizon U Media Communications is expected to under-perform the Tainet Communication. In addition to that, U Media is 1.19 times more volatile than Tainet Communication System. It trades about -0.23 of its total potential returns per unit of risk. Tainet Communication System is currently generating about 0.02 per unit of volatility. If you would invest 7,660 in Tainet Communication System on October 24, 2024 and sell it today you would earn a total of 40.00 from holding Tainet Communication System or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
U Media Communications vs. Tainet Communication System
Performance |
| Timeline |
| U Media Communications |
| Tainet Communication |
U Media and Tainet Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Media and Tainet Communication
The main advantage of trading using opposite U Media and Tainet Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Media position performs unexpectedly, Tainet Communication 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 Tainet Communication will offset losses from the drop in Tainet Communication's long position.| U Media vs. Phytohealth Corp | U Media vs. Sesoda Corp | U Media vs. Cameo Communications | U Media vs. Johnson Health Tech |
| Tainet Communication vs. Elite Material Co | Tainet Communication vs. Formosan Rubber Group | Tainet Communication vs. Daxin Materials Corp | Tainet Communication vs. Data International 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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